Simplifying A Complex Process

Take advantage of adoption tax credits to complete your family

On Behalf of | Mar 30, 2023 | Adoption

If you are considering adopting a child in Michigan, you may be eligible for a federal adoption tax credit to help cover adoption expenses. There are at least two ways that you can take the tax credit.

Subtract Adoption Expenses

Taxpayers adopting a child through a United States private or public agency can subtract adoption expenses from their taxes as they incur them. For example, they can deduct adoption agency fees, adoption attorney fees, court costs and travel expenses as they pay them as long as the total is under $15,950 for taxes you will file in 2024. For some adopting parents, this allows them to subtract expenses from their taxes for more than one year.

Subtract Adoption Expenses All at Once

The law also gives adopting parents the right to subtract all their expenses from their taxes at once. While parents adopting in the U.S. have this option, those adopting from overseas must follow this option. They can subtract the same type of expenses.

Who is eligible for an adoption tax credit

Taxpayers who make less than $239,230 can claim the full adoption tax credit while those making between $239,230 and $279,230 can claim a partial credit as long as they are adopting a child who is 16 or younger. If the person is 17 or older, the tax credit can be claimed if the adoptee cannot care for themselves. Note that the credit is unavailable to stepparents adopting their spouse’s children.

An adoption tax credit is available to taxpayers making less than $279,230 annually to help cover the expenses of the adoption process, like court and attorney fees, travel costs and agency fees.