The adoption tax credit is a lovely thing. It offers a direct financial benefit to families who adopt. The benefit is better for families who adopt special needs children. There is much written about the policy and mechanics of the federal adoption tax credit. It is not a new thing. And note that, like most tax provisions, not everyone is eligible and not every expense is covered, and there is a limitation of $17,280. But in the past, families needed t owe tax to use the credit. Effective 2025, $5000 of the credit will be refundable even for families who don’t owe tax.
I am not a tax lawyer. My goal here is to alert you to the change only. If you or your clients are in a position to use the federal adoption tax credit, you can get more information at the IRS website.
https://www.irs.gov/credits-deductions/individuals/adoption-credit
Dawn
