IRS Publication 6123 – Adoption Tax Credit Checklist – Are you navigating the complexities of adopting a child and wondering how to maximize tax benefits? IRS Publication 6123, the Adoption Tax Credit Checklist, serves as an essential guide for families claiming the adoption tax credit. Released in November 2025, this publication helps taxpayers verify eligibility, gather necessary documents, and avoid common pitfalls when filing for the credit on their federal tax returns. In this SEO-optimized article, we’ll break down the key elements of Publication 6123, explain the adoption tax credit in detail, and provide a step-by-step checklist based on official IRS guidelines. Whether you’re filing for tax year 2025 (due in 2026) or planning for 2026, understanding this credit can significantly offset adoption costs.
We’ll draw from trusted IRS sources to ensure accuracy, including updates from the One, Big, Beautiful Bill and inflation adjustments for upcoming years.
What Is the Adoption Tax Credit?
The adoption tax credit is a federal incentive designed to help offset the high costs associated with adopting a child. It reduces your tax liability dollar-for-dollar and, starting in 2025, includes a refundable portion—meaning you could receive money back even if you owe no taxes. The credit applies to qualified adoption expenses, such as fees, court costs, attorney fees, travel, and other direct costs.
For tax year 2025 (filed in 2026), the maximum credit is $17,280 per eligible child, with up to $5,000 refundable. For tax year 2026 (filed in 2027), the maximum increases to $17,670 per child, with up to $5,120 refundable due to inflation adjustments. This credit is available for domestic, international, private, or foster care adoptions, and it’s nonrefundable portions can be carried forward for up to five years.
Employer-provided adoption assistance can also be excluded from your income up to the same limits, but you can’t double-dip on the same expenses for both the credit and exclusion.
Who Qualifies for the Adoption Tax Credit?
Eligibility hinges on several factors outlined in IRS guidelines. Publication 6123 emphasizes checking these criteria before claiming the credit to ensure compliance and maximize benefits.
Key Eligibility Requirements
- Income Limits: Your modified adjusted gross income (MAGI) must be $259,190 or less for the full credit in 2025. The credit phases out between $259,191 and $299,189, and it’s unavailable above $299,190. For 2026, these thresholds may adjust upward (e.g., full credit below approximately $265,080 based on preliminary estimates).
- Qualified Child: The child must be under 18 or physically/mentally incapable of self-care. For special needs adoptions, the child must be a U.S. citizen or resident, and a state or Indian tribal government must certify special needs status. Starting in 2025, Indian tribal governments have equal authority to make this determination.
- Filing Status: Married couples must file jointly, with limited exceptions. Registered domestic partners may qualify in states allowing second-parent adoptions, but you can’t claim for adopting a spouse’s child.
- Adoption Type: Covers U.S. citizens/residents or foreign children, but timing differs—domestic adoptions allow claiming expenses as incurred, while foreign adoptions require finalization first.
If adopting a child with special needs, you may claim the full credit even without expenses, provided eligibility is met.
The Adoption Tax Credit Checklist from IRS Publication 6123
IRS Publication 6123 provides a practical, yes/no-style checklist to help you assess eligibility and prepare your claim. Based on the publication’s structure (as referenced in official IRS resources and related documents like Publication 6130), here’s a detailed breakdown of the key checklist items. This is tailored for tax year 2025 filings in 2026, with notes for 2026 updates.
Step 1: Verify Basic Eligibility
- Do you have a qualified eligible child? Yes/No. Confirm the child is under 18 or incapable of self-care. For special needs, obtain certification from a state or tribal agency.
- Was the adoption finalized (or in process for domestic)? Yes/No. Include documentation like the adoption decree or court order.
- Is your MAGI within limits? Yes/No. Calculate MAGI and check phase-out ranges. Use IRS tools or Form 8839 worksheets for precision.
Step 2: Identify Qualified Expenses
- Did you incur reasonable and necessary adoption expenses? Yes/No. List includes adoption fees, legal costs, travel (meals/lodging), and home study fees. Exclude employer-reimbursed or non-direct costs.
- Have you tracked expenses by year? Yes/No. For multi-year adoptions, subtract prior claims from the max credit. Keep receipts and records for at least three years.
- Are expenses for a special needs adoption? Yes/No. If yes, you may qualify for the full amount without expenses.
Step 3: Gather Required Documents
- Child’s Identifying Number: Obtain SSN, ATIN (via Form W-7A for pending U.S. adoptions), or ITIN (via Form W-7 for foreign children).
- Adoption Records: Final adoption order, expense receipts, special needs certification (e.g., subsidy agreement or agency letter).
- Employer Benefits: If applicable, Form W-2 showing adoption assistance (Box 12, code T).
Step 4: Check for Special Situations
- International Adoption? Yes/No. Claim only after finalization; no credit if unsuccessful.
- Employer Assistance? Yes/No. Exclude up to $17,280 (2025) from income, but adjust credit accordingly.
- Carryforward Needed? Yes/No. Nonrefundable amounts carry forward up to 5 years; forfeited after.
Step 5: Refundable Portion Review
- Do you qualify for the refundable credit? Yes/No. Up to $5,000 per child in 2025 (increasing to $5,120 in 2026). This applies only to the current year’s claim, not carryforwards.
Notes from Publication 6123: Always consult IRS.gov for updates, as amounts adjust annually. If “No” to any item, you may not qualify—seek professional tax advice. The checklist also warns against claiming duplicate benefits and stresses accurate reporting to avoid audits.
How to Claim the Adoption Tax Credit?
Use Form 8839, Qualified Adoption Expenses, attached to your Form 1040. Report the credit on Schedule 3 (Form 1040). For special needs, include supporting docs. If carrying forward, use the Nonrefundable Adoption Credit Carryforward Worksheet.
TurboTax or other software can help, but verify with IRS instructions.
Recent Changes and Updates for 2026
The One, Big, Beautiful Bill introduced refundability and expanded tribal authority. For 2026, expect higher limits due to inflation: $17,670 max credit and adjusted phase-outs. Check IRS Publication 6124 for quick facts or Publication 6130 for an infographic overview.
Frequently Asked Questions About the Adoption Tax Credit
- How much can I claim in 2026? Up to $17,670 per child, with phase-outs starting around $265,080 MAGI.
- Is the credit refundable? Partially—up to $5,000 in 2025, $5,120 in 2026.
- What if my adoption fails? For domestic, you can still claim paid expenses; not for foreign.
- Can I amend past returns? Yes, if you change filing status or discover eligibility.
Conclusion
IRS Publication 6123 simplifies claiming the adoption tax credit by providing a clear checklist to ensure you don’t miss out on this valuable benefit. With potential savings of thousands, it’s worth reviewing your eligibility today. Download the PDF from IRS.gov and consult a tax professional for personalized advice. Stay updated via IRS newsroom for 2026 adjustments.
By following this guide, families can confidently navigate the adoption tax credit process, making the journey to parenthood a bit more affordable.