We were paid by the state an adoption subsidy for a child we adopted. Where do I enter the amount we recieved on our tax forms? Last year it just popped up.

An adoption subsidy is not considered to be taxable income for Federal purposes.  However, any portion of adoption expenses that are paid with the subsidy cannot be claimed as amounts paid for the Adoption Credit.

 

Since 1974, the IRS has ruled that adoptive parents do not need to include adoption assistance benefits in their taxable income.

Click here for Adoption Credit

Click here for additional information on the Adoption Credit.

 

Click here for information on the Adoption Tax Credit for 2024-2025.