Adoption Tax Credit: What You Should Know for 2025

Considering adoption or recently finalized one? There may be valuable tax benefits available to help offset the costs.

For the 2025 tax year, the Adoption Tax Credit is available for up to $17,280 per eligible child, providing meaningful financial support for adoptive families.

Qualifying Adoption Expenses

You may be able to claim a variety of adoption-related expenses, including:

• Adoption fees

• Court and legal costs

• Travel expenses (meals and lodging)

• Other necessary adoption-related expenses

Who Qualifies as an Eligible Child?

To qualify for the credit, the adopted child must be:

• Under age 18, or

• Needs support with personal care due to a physical or mental disability

Partial Refundability Benefit

Starting in 2025 and beyond, the credit is partially refundable, meaning you may be able to receive a portion of the credit even if it exceeds your total tax liability.

• The refundable portion is limited to up to $5,000 per qualifying child

• Any unused nonrefundable portion can still be carried forward, but it cannot be used to calculate a future refundable amount

Income Limits to Keep in Mind

Your eligibility for the Adoption Tax Credit depends on your modified adjusted gross income (MAGI):

• Full credit available: MAGI of $259,190 or less

• Reduced credit: MAGI between $259,191 and $299,189

• No credit available: MAGI of $299,190 or more

Final Thoughts

Adopting a child is a life-changing decision, and the associated costs can add up quickly. The Adoption Tax Credit can provide meaningful financial relief—so it’s important to understand your eligibility and plan accordingly.