Tax Credit Amount

• Maximum credit: $17,280 per adopted child.
• Refundable portion: Up to $5,000 per child is refundable for new credits claimed for 2025.
• The remaining credit can be used to reduce federal income taxes owed and carried forward if not fully used.

Who Qualifies?

To claim the credit:

• The child must be adopted (not a stepchild).
• The child must be:
  • Under age 18, or
  • Physically or mentally incapable of self-care.
• Income limits apply.

Income Limits (2025)

• Full credit: Modified Adjusted Gross Income (MAGI) below $259,191
• Partial credit: MAGI between $259,191 and $299,190
• No credit: MAGI above $299,190

Special Needs Adoptions

If a child is officially determined to have special needs, adoptive parents can claim the full $17,280 per child regardless of adoption expenses.

Generally, a special needs child:

• Is a U.S. citizen or resident.
• Cannot safely return to their birth parents.
• Has been determined by the state or tribe to require adoption assistance in order to be adopted.

Important:

• International adoptions never qualify as "special needs" for this credit.
• Simply having a disability does not automatically qualify a child as special needs.

Other Adoptions

For children who do not qualify as special needs:

• The credit is based on qualified adoption expenses (legal fees, agency fees, travel, court costs, etc.).
• Expenses reimbursed by an employer or another source cannot be claimed.
• Maximum credit remains $17,280 per child.

When to Claim

• Special needs adoption: Claim in the year the adoption is finalized.
• International adoption: Claim only in the year of finalization.
• Domestic adoption: Qualified expenses may be claimed in the year after they were paid or in the year of finalization, depending on timing.

How the Credit Works

• Up to $5,000 per child is refundable in the first year.
• Any remaining unused credit may be carried forward for five additional years (six years total including the initial year).
• Carryforward amounts are not refundable.

Interaction with Child Tax Credit

The Child Tax Credit and Credit for Other Dependents can reduce how much of the Adoption Tax Credit you are able to use in a given year.

How to Claim

• File IRS Form 8839 with your 2025 Form 1040.
• Most tax software prepares Form 8839 automatically.
• E-filing is allowed.
• No supporting adoption documentation is required with the return for 2025.

Families Rising 2025 Federal Adoption Tax Credit

Utah does not offer a separate state-level adoption tax credit, but families may benefit from:

• Federal Adoption Tax Credit (primary financial benefit)
• Utah state tax deductions or credits that may indirectly apply depending on filing status and annual legislative updates
• Employer-provided adoption assistance programs (often tax-advantaged federally)