Form 8839

IRS Form 8839, titled Qualified Adoption Expenses, is designed for taxpayers who have incurred expenses related to the adoption of a child. This form allows taxpayers to claim a tax credit for qualifying adoption-related expenses, and in some cases, exclude employer-provided adoption assistance from their taxable income.

Adopting a child can be a rewarding yet expensive process. The IRS provides financial relief through the adoption tax credit, which helps offset some of the costs incurred during the adoption process. If you adopted a child or are in the process of doing so, Form 8839 is essential to claim your credit. Form 8839 is used to claim:

  1. Adoption Credit – A nonrefundable tax credit for qualified adoption expenses paid to adopt an eligible child.
  2. Employer-Provided Adoption Benefits – The exclusion of employer-provided adoption benefits from your taxable income.

The credit and exclusion may be applied toward domestic, international, and special needs adoptions.

What are Qualified Adoption Expenses?

Qualified adoption expenses include:

  • Adoption fees
  • Court costs
  • Attorney fees
  • Travel expenses (including lodging and meals)
  • Other costs directly related to the adoption of an eligible child

Eligibility Criteria

You can claim the adoption tax credit or exclusion if:

  • You incurred expenses to adopt an eligible child (a child under 18 years of age or physically or mentally incapable of self-care).
  • The adoption was either domestic or international.
  • You adopted a child with special needs, in which case you may be eligible for the full credit, even if you had no qualifying expenses.

How to File Form 8839?

Filing Form 8839 requires you to complete specific sections depending on whether you are claiming the adoption credit, excluding employer-provided adoption assistance, or both. Here’s a breakdown of the steps involved:

Form 8839 Instructions
Form 8839 1

Form 8839 Instructions

1. Obtain the Form

You can download Form 8839 from the IRS website or use tax preparation software that supports this form.

Part I: Information About Your Eligible Child or Children

This section collects basic details about each child you are adopting.

  • Line 1 (a) – (g):
    • Enter the name, year of birth, and identifying number (Social Security Number or Adoption Taxpayer Identification Number) of the adopted child.
    • Check the appropriate boxes for:
      • If the child was born before 2006 and is disabled.
      • Whether the child is classified as a child with special needs.
      • Whether the child was adopted from a foreign country.
      • Indicate if the adoption became final in 2024 or an earlier year.

Caution: If the child was adopted from a foreign country, refer to the special rules in the instructions.

Part II: Adoption Credit

  • Line 2: Enter the maximum adoption credit for each child. For 2024, the maximum amount is $15,950 per child.
  • Line 3: If you previously filed Form 8839 for the same child, enter the amount from that previous filing. If this is your first time filing for this child, enter $0.
  • Line 4: Subtract Line 3 from Line 2 to determine the available credit.
  • Line 5: Enter the total qualified adoption expenses for 2024 (refer to the instructions to ensure you are calculating qualified expenses correctly).
  • Line 6: Enter the smaller of Line 4 or Line 5. This is your adoption credit per child.
  • Line 7: Enter your modified adjusted gross income (MAGI). The adoption credit begins to phase out for individuals with MAGI above $239,230 in 2024.
  • Line 8-9: If your MAGI exceeds the threshold, calculate the phase-out using the instructions for these lines.
  • Line 10-11: Perform the necessary calculations to adjust the adoption credit based on your income.
  • Line 12: Add the amounts from Line 11 for all adopted children to calculate your total adoption credit.
  • Line 13: If you have any adoption credit carryforward from previous years, enter it here.
  • Line 14: Add Lines 12 and 13 to determine your total credit.
  • Line 15: Enter the amount from the Credit Limit Worksheet found in the form instructions.
  • Line 16: Enter the smaller of Line 14 or Line 15. This is the adoption credit you can claim on your tax return.

Part III: Employer-Provided Adoption Benefits

If your employer provided you with adoption assistance, fill out Part III to exclude these amounts from your taxable income.

  • Line 17: Enter the maximum exclusion per child, which is $15,950 for 2024.
  • Line 18: If you previously received employer-provided adoption benefits for the same child, enter the amount from your previous filing. If not, enter $0.
  • Line 19: Subtract Line 18 from Line 17 to determine the available exclusion.
  • Line 20: Enter the total employer-provided adoption benefits you received in 2024. This amount is typically listed in Box 12 of your W-2 form with the code “T.”
  • Line 21: Add the amounts from Line 20.
  • Line 22: Enter the smaller of Line 19 or Line 20. However, if the child has special needs and the adoption became final in 2024, enter the amount from Line 19.
  • Line 23: Enter your modified adjusted gross income.
  • Line 24-25: If your MAGI exceeds the threshold, calculate the phase-out using the instructions.
  • Line 26-27: Perform the necessary calculations to adjust the exclusion based on your income.
  • Line 28: Add the amounts from Line 27 to determine your total exclusion.
  • Line 29: If Line 28 exceeds the amount on Line 21, calculate any taxable benefits and enter this amount on your tax return.

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