Form 8839 - Qualified Adoption Expenses
Form 8839, titled "Qualified Adoption Expenses," is an official Internal Revenue Service (IRS) document used to claim the Adoption Tax Credit. This credit helps offset federal income taxes for eligible taxpayers who adopt a child.
What is Form 8839?
Form 8839 is an official Internal Revenue Service (IRS) document used to calculate the Adoption Tax Credit. It allows you to claim a credit for qualified adoption expenses incurred while adopting a child.
What are Qualified Adoption Expenses?
Qualified Adoption Expenses (QAE) are the necessary costs associated with adopting a child under 18 or an adult with a disability who requires constant care. These expenses can include:
Adoption fees: Charges levied by adoption agencies or facilitators to connect you with a child for adoption.
Court costs: Fees associated with finalizing the adoption in court.
Attorney fees: Legal costs incurred for services related to the adoption process.
Travel expenses: Reasonable costs for travel related to the adoption, including transportation, meals, and lodging.
Other adoption-related costs: In some cases, miscellaneous expenses like translation services or background checks might be considered QAE. However, it's crucial to consult with a tax professional to confirm eligibility.
Important Note: There's a limit on how much you can claim for qualified adoption expenses. For tax year 2023, the maximum credit is $15,950 per eligible child. This amount increases to $16,810 for tax year 2024.
Who Can Claim the Adoption Tax Credit?
To claim the Adoption Tax Credit using Form 8839, you must meet the following eligibility criteria:
- You adopted a child under the age of 18 or an individual with a disability who requires constant care.
- The adopted child became a U.S. citizen or resident.
- You paid qualified adoption expenses.
- Your modified adjusted gross income (MAGI) falls within the income limits set by the IRS (gradually phases out for higher incomes).
Note: You cannot claim the credit for a child adopted from a spouse or a biological or legally adopted sibling.
Who is eligible to claim the Adoption Credit?
You can claim the adoption credit if you are a U.S. citizen or resident who adopted a child who is a U.S. citizen or resident. You may also be eligible if you adopted a foreign child and meet specific requirements outlined by the IRS.
What are the income limits for claiming the Adoption Credit?
The adoption credit begins to phase out for taxpayers with Modified Adjusted Gross Income (MAGI) exceeding a certain threshold. For the latest information, visit this page: https://www.irs.gov/pub/irs-pdf/f8839.pdf.
What is the maximum Adoption Tax Credit amount?
For tax year 2, the maximum Adoption Tax Credit is $16,810 per eligible child. The credit amount begins to phase out for taxpayers with Modified Adjusted Gross Income (MAGI) exceeding a specific threshold.
How long do I have to keep records of my Qualified Adoption Expenses?
The IRS recommends keeping records of your QAE for at least three years from the date you file your tax return claiming the adoption credit.
Can I claim the Adoption Credit if I adopted jointly with someone else?
Yes, if you adopted a child jointly with another taxpayer (other than your spouse filing jointly), you can claim the credit and split the maximum amount however you both agree.