Although adoptive parents should always consult a tax specialist, it is true that families who adopt a child or teen with special needs from foster care can claim a federal adoption tax credit without needing to incur or document expenses.
Children who are harder to place for adoption — older children (including teens of any age), children of color, sibling groups, and children with medical conditions or disabilities — are often determined to have special needs.
There is a federal adoption tax credit of up to $14,890 per child for families who finalize the adoption of a child with special needs in 2022 and fulfill the eligibility requirements.
For non-special needs adoptions, parents can claim the tax credit based on their qualified adoption expenses that have not been reimbursed by anyone else. If the expenses are less than $14,890, parents can only claim the amount of those expenses. If the expenses exceed $14,890, parents can only claim $14,890 per child.
For more specifics about the adoption tax credit, visit the North American Council on Adoptable Children’s website.