IRS Instruction 8839 -The Adoption Tax Credit helps families offset the high costs of adopting a child. For tax year 2025, you claim this credit (and any employer-provided adoption benefits exclusion) using Form 8839, Qualified Adoption Expenses.
The IRS released the 2025 instructions and form in late 2025, incorporating key changes from the One, Big, Beautiful Bill Act (signed July 2025), including a refundable portion of the credit for the first time.
Download the official documents here:
What Is Form 8839 Used For?
You file Form 8839 to:
- Calculate your adoption credit (nonrefundable + up to $5,000 refundable per child).
- Figure the amount of employer-provided adoption benefits you can exclude from income.
You can claim both the credit and the exclusion for the same adoption, but not for the same expenses. Attach Form 8839 to your Form 1040, 1040-SR, or 1040-NR.
Who Qualifies for the Adoption Tax Credit?
You qualify if you paid qualified adoption expenses for an eligible child and your modified adjusted gross income (MAGI) is below the phaseout threshold.
Eligible child:
- Under age 18 at the time of adoption (or any age if physically or mentally unable to care for themselves).
- U.S. citizen or resident, or a foreign child (with special rules).
Special needs child (U.S. child only): A state or Indian tribal government determination that the child cannot or should not return to their parents’ home and needs assistance to be adopted. You can claim the full credit even with $0 expenses if the adoption finalized in 2025.
Married couples generally must file jointly. Exceptions apply in limited cases (e.g., lived apart the last 6 months of the year and you provided over half the cost of keeping up the home).
Qualified Adoption Expenses
Qualified adoption expenses are reasonable and necessary costs paid primarily for the legal adoption of an eligible child. Common examples include:
- Adoption fees
- Attorney fees
- Court costs
- Travel expenses (including meals and lodging) while away from home
- Re-adoption expenses for foreign children
- Home study fees (even before identifying a specific child)
Expenses that do NOT qualify:
- Reimbursed by your employer or a government program
- Paid to adopt your spouse’s child
- Surrogate parenting arrangements
- Expenses that violate state or federal law
- Amounts already claimed as a deduction or credit elsewhere
The total qualified expenses you can use for the credit or exclusion cannot exceed $17,280 per child in 2025.
2025 Adoption Tax Credit Amounts and Phaseouts
- Maximum credit or exclusion: $17,280 per eligible child (total of nonrefundable + refundable portions).
- Refundable portion (new for 2025): Up to $5,000 per child can be refunded even if you owe no tax.
- Phaseout based on MAGI:
- $259,190 or less → Full credit/exclusion
- $259,191 – $299,189 → Reduced proportionally
- $299,190 or more → No credit/exclusion (carryforward from prior years may still be available)
The reduction is calculated as: (MAGI – $259,190) ÷ $40,000 (rounded, max 1.000) × allowable amount.
New for 2025: Up to $5,000 Refundable
Thanks to legislation signed in 2025, a portion of the adoption credit is now refundable. Previously the entire credit was nonrefundable. The refundable amount is calculated per child on Form 8839, lines 11a–11c.
Unused nonrefundable credit can be carried forward up to 5 years (but it remains nonrefundable).
How to Complete Form 8839 (Step-by-Step Overview)?
Part I — List each eligible child (name, year of birth, special needs/foreign indicators, identifying number, finalization year).
Part II — Adoption Credit
- Enter max $17,280 per child
- Subtract prior-year amounts used
- Enter your qualified expenses
- Apply MAGI phaseout
- Calculate refundable (up to $5,000) and nonrefundable portions
Part III — Employer-Provided Adoption Benefits (if you received any shown in Box 12 of W-2 with code T).
If you have more than 3 children or complex foreign adoption rules, attach statements or use the worksheets in the instructions.
Special Rules
- Foreign adoptions — Adoption must be final before you claim the credit. Use the Exclusion of Prior Year Benefits Worksheet if you received employer benefits before finalization.
- Special needs adoptions — Full $17,280 credit/exclusion available in the year of finalization, even with no expenses.
- Unsuccessful domestic adoptions — Expenses can still qualify in certain cases.
Carryforward of Unused Credit
Any unused nonrefundable credit carries forward for up to 5 years. Use the Nonrefundable Adoption Credit Carryforward Worksheet in the instructions. The refundable portion cannot be carried forward.
Final Tips
- Keep all receipts and records — the IRS may ask for proof of expenses and finalization.
- Use tax software — most programs automatically generate Form 8839.
- Check for state adoption credits — many states offer additional benefits.
For the most accurate and up-to-date information, always refer directly to the official IRS documents linked above or consult a tax professional familiar with adoption tax rules.
Sources: IRS Instructions for Form 8839 (2025), IRS Adoption Credit page, and Form 8839 (2025). All amounts and rules reflect tax year 2025 as published by the IRS in December 2025–January 2026.