If you already adopted a child or have simply started the adoption process, you may be eligible for a credit on your 2015 tax return.The credit is limited to the qualified adoption expenses you paid, up to $13,400. In addition, the credit is reduced when your modified adjusted gross income is between $201,010 and $241,010.
The adoption credit is not always claimed in the same year the expenses were paid. It all depends on whether the child is a U.S. citizen or resident when the expense is paid, and when the adoption becomes final.
If the child is a U.S. citizen or resident and the adoption expenses (including those incurred in an unsuccessful effort to adopt an eligible child) are paid during a tax year prior to the tax year in which the adoption is finalized, the credit is allowed in the tax year following the year the expenses were paid. If the child is neither a U.S. citizen nor resident, the credit is allowed only in the year the adoption becomes final.
If an expense is paid for a child (regardless of citizenship status) during or after the year the adoption becomes final, the credit is allowed in the tax year paid or incurred.
If the adoption credit for the year exceeds the income tax for that year, the excess credit is carried forward to the next tax year. No adoption credit can be carried forward to any tax year following the fifth tax year after the year in which the credit is derived.
The adoption credit is not a refundable credit for any adoption that occurred after 2011.
If you adopt twins or triplets, you are eligible to claim the tax credit for each child.