Many adoptive parents are entitled to a federal adoption tax credit on their income tax obligations. Parents who adopted a child who has been determined to be special needs by the state or county child welfare agency can claim the maximum credit regardless of whether they have qualified adoption expenses at all. For other adoptions (other than stepparent adoptions, which are not eligible for the credit at all), parents can claim the credit for qualified adoption expenses up to the maximum amount of the credit in any given year.* So if a family has $5,000 in expenses for a private, non-special needs adoption, they can claim only that $5,000 not the maximum. Families who have expenses above the maximum can only claim the maximum. In all cases, how much a parent will actually receive in a given year depends on their tax liability as the credit is currently non-refundable (but it does carry forward). Please be aware that we are not versed in tax law and provide no advice or opinion regarding your eligibility for the tax credit. We encourage you to consult your own tax attorney, accountant, or other trusted tax advisor with any tax questions. You may also be interested in reviewing adoption credit materials found at www@irs.gov for a fuller discussion of tax related benefits for adoptive parents. *The IRS released Revenue Procedure 2019-44 (a link is here: https://www.irs.gov/pub/irs-drop/rp-19-44.pdf ) listing the Adoption Tax Credit adjusted numbers for 2020. The maximum amount allowed is set at $14,300 per child for 2020 (it was $14,080 in 2019). The tax credit starts to phase out for families with modified adjusted gross income in excess of $214,520, and is completely phased out for families with modified adjusted gross income of $254,520 or more.