2023 Adoption Tax Credit Explained

Welcome back to Ask a CPA, your go-to channel for all things tax-related! I'm Brett Philips, and today, we've got a topic that can save you significant money. If you're considering or have recently adopted a child, this is the video for you.

So this week I sat down with a young couple going down the road of adoption. After a long fight with infertility, they have decided to make their family complete through an adoption. As they have come to find out, adoption is expensive. The cost of adopting a child can be anywhere from $5,000 to $60,000. These numbers can vary significantly based on which adoption agency is used, whether the child is a U.S. citizen or comes from another country, or whether the child is adopted through fostering.

So, after some research and a few long conversations with my client, the main talking points we addressed and the topics we will cover in this video include the following:

- What is an “eligible child” for the adoption tax credit?

- What is the adoption tax credit?

- What is the special needs exception?

- What are qualified adoption expenses?

- Can you claim the credit for a failed adoption?

- What are employer-provided adoption benefits?

- How can I show proof of my adoption expenses?

- How can I claim the adoption tax credit?

- When can I claim the adoption tax credit?

Alright, there is lots of great information in today's video… Let’s get into it.