IRS Publication 5851-B – Adoption tax credit – Adopting a child is a life-changing decision that comes with significant emotional and financial considerations. Fortunately, the IRS offers the Adoption Tax Credit to help offset some of the costs involved in the adoption process. This nonrefundable tax credit, detailed in IRS Publication 5851-B, can provide substantial relief for eligible families. Whether you’re adopting domestically, internationally, or through foster care, understanding this credit is essential for maximizing your tax benefits in 2026. In this guide, we’ll break down the key aspects of the adoption tax credit, including eligibility, amounts for tax years 2025 and 2026, how to claim it, and more.
What Is IRS Publication 5851-B?
IRS Publication 5851-B, titled “Adoption Tax Credit,” is a concise resource designed to inform taxpayers about the federal tax benefits available for adoptions. It outlines the purpose of the credit, eligibility criteria, qualified expenses, and how to apply for it. The publication applies to adoptions finalized or initiated during the tax year and covers international, domestic, private, and public foster care adoptions. Released in its latest revision in November 2025, it’s an essential tool for new parents navigating tax season. You can download it directly from the IRS website for free.
This publication is part of a broader suite of IRS resources, including checklists like Publication 6123, which helps verify eligibility for the adoption credit. It’s particularly useful for taxpayers filing their 2025 returns in 2026, as it highlights recent legislative changes making portions of the credit refundable.
Eligibility Requirements for the Adoption Tax Credit
To qualify for the adoption tax credit, you must meet specific IRS criteria. The credit is available if:
- You adopted an eligible child under the age of 18 or a child of any age who is physically or mentally incapable of self-care.
- You paid qualified adoption expenses directly related to the legal adoption process.
- Your modified adjusted gross income (MAGI) falls within the allowed limits (more on phase-outs below).
Note that you cannot claim the credit for adopting your spouse’s child. However, in states recognizing second-parent or co-parent adoptions for registered domestic partners, qualified expenses may still apply. The credit is open to single filers, married couples, and heads of household, but income thresholds can reduce or eliminate it.
For special needs adoptions, where a state or Indian tribal government determines the child has special needs, you may qualify for the full credit amount even if your actual expenses are lower or zero. This provision, expanded in recent legislation, recognizes tribal governments’ authority starting in 2025.
Adoption Tax Credit Amounts and Income Limits for 2025 and 2026
The maximum credit amount is adjusted annually for inflation and varies by tax year. Here’s a breakdown:
For Tax Year 2025 (Returns Filed in 2026)
- Maximum Credit: $17,280 per eligible child.
- Refundable Portion: Up to $5,000 per child, meaning you can receive this as a refund even if you owe no taxes.
- Income Phase-Out: The credit begins to phase out for MAGI between $259,191 and $299,189. It’s fully available below $259,190 and unavailable above $299,190.
- Unused non-refundable portions can be carried forward for up to five years.
For Tax Year 2026 (Returns Filed in 2027)
- Maximum Credit: $17,670 per eligible child.
- Refundable Portion: Up to $5,120 per child.
- Income Phase-Out: Full credit for MAGI below $265,080; partial credit between $265,081 and $305,079; no credit above $305,080.
These increases reflect inflation adjustments outlined in IRS Revenue Procedure 2025-32. If you’re planning an adoption in 2026, these higher limits could provide even more financial support.
| Tax Year | Max Credit per Child | Refundable Amount | Phase-Out Start (MAGI) | Phase-Out End (MAGI) |
|---|---|---|---|---|
| 2025 | $17,280 | $5,000 | $259,191 | $299,189 |
| 2026 | $17,670 | $5,120 | $265,081 | $305,079 |
What Counts as Qualified Adoption Expenses?
Qualified adoption expenses (QAEs) are the foundation of the credit. They include:
- Reasonable and necessary adoption fees.
- Court costs and attorney fees.
- Travel expenses, including meals and lodging while away from home.
- Other direct costs related to the legal adoption of an eligible child.
Expenses can qualify even if paid before identifying a specific child, such as home study fees at the start of the process. However, you cannot claim expenses reimbursed by an employer, grant, or other source, as this would reduce your eligible credit amount.
For international adoptions, timing matters—expenses are generally claimed in the year the adoption is finalized.
How to Claim the Adoption Tax Credit?
Claiming the credit is straightforward but requires documentation:
- Gather records of your qualified expenses, including receipts and adoption paperwork.
- Complete Form 8839, Qualified Adoption Expenses, to calculate your credit.
- Attach Form 8839 to your Form 1040 or 1040-SR tax return.
- If applicable, obtain an Adoption Taxpayer Identification Number (ATIN) for the child if they don’t have a Social Security Number yet.
File electronically for faster processing, and keep records for at least three years in case of an audit. If your credit exceeds your tax liability, remember the carry-forward option.
Employer-Provided Adoption Benefits
Many employers offer adoption assistance programs, allowing you to exclude up to $17,280 (for 2025) from your gross income. This exclusion is in addition to the credit, but if you receive both, the credit is reduced by the excluded amount. For example, if your employer reimburses $4,000 and your total QAEs are $10,000, your maximum credit would be $6,000.
Check with your HR department to see if your workplace provides this benefit under a qualified adoption assistance program.
Recent Changes and Special Considerations
Recent legislation, including provisions in the “One Big Beautiful Bill,” has made the adoption credit partially refundable starting in tax years after 2024. This means up to $5,000 (2025) or $5,120 (2026) can be refunded directly to you. Additionally, Indian tribal governments now have the same authority as states to certify special needs for credit purposes.
For foster care adoptions, the credit often covers children with special needs, providing the full amount regardless of expenses. Always consult a tax professional for complex situations, such as failed adoptions or multiple children.
Frequently Asked Questions About the Adoption Tax Credit
1. Can I claim the credit if my adoption isn’t finalized yet?
Yes, you can claim expenses in the year paid, but the full credit is typically claimed in the finalization year.
2. Is the adoption tax credit refundable?
Partially—up to $5,000 for 2025 and $5,120 for 2026.
3. What if my income is too high?
The credit phases out based on MAGI. Use IRS tools or Form 8839 to calculate your reduced amount.
4. Does this credit apply to stepchild adoptions?
No, not for your spouse’s child.
Conclusion: Maximize Your Adoption Tax Benefits in 2026
The IRS Adoption Tax Credit, as explained in Publication 5851-B, is a valuable resource for easing the financial burden of adoption. With maximum credits reaching $17,670 in 2026 and refundable portions available, eligible families can receive significant support. Review your eligibility, track expenses carefully, and consider consulting a tax advisor to ensure you claim every dollar you’re entitled to. For the latest updates, visit IRS.gov or download Publication 5851-B today. Adopting a child is rewarding—let the tax credit make it a little easier.