Are there tax incentives for adoption?

On Behalf of | Oct 27, 2020 | Tax Issues

Adopting a child is a joyous occasion, but for many families, it ends up being an expensive one as well. Private adoptions are much more expensive than adopting through the foster system, but they are what works the best for many families.

If you have adopted a child this year, you may wonder if there is any relief for the expenses related to the process. The IRS explains that you do have some options for adoption tax breaks.

Income limits

Your ability to get credits for adoption costs depends on your total income. There is a phase-out point based on your modified adjusted gross income where you can no longer get the credits if you make over a certain amount. In addition, the IRS sets limits on each type of credit and the amount you may claim for each.


While you cannot take your expenses as a deduction, you can get credits for some adoption-related expenses. The tax laws provide you the opportunity to take credits for fees you pay related to the adoption and securing the services of an attorney. You can also take credits for any court costs you incur. Since many adoptions require traveling, the tax law also gives you the chance to get credit for some travel expenses. While these are the main credits available, there are other credits for further expenses related to your adoption journey.

If your adoption spans over multiple years, which is a common occurrence, the tax law does offer the chance to claim credits for multiple years for the same adoption. There are reductions that apply in this situation.

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