Specific Instructions

Part I—Information About Your Eligible Child or ChildrenLine 1

Complete all columns that apply to the eligible child you adopted or tried to adopt.

If you cannot give complete information about an eligible child you tried to adopt in 2012 because the adoption was either unsuccessful or was not final by the end of 2013, complete the entries that you can on line 1. Leave blank any entries you are unable to complete. For example, if you do not have an SSN or ATIN for your eligible child, leave column (f) blank.

For examples of the type of records you may want to keep to substantiate your claim for the adoption credit, see Notice 2010-66, 2010-42 I.R.B. 437 available at www.irs.gov/irb/2010-42_IRB/ar09.html.

Attempted Adoptions of U.S. Children

In general, the dollar limitation requires you to combine the qualified adoption expenses you paid if you made more than one attempt to adopt one eligible U.S. child. When you combine the amounts you spent, complete only the “Child 1” line. Do not report the additional attempt(s) on the “Child 2” or “Child 3” line. Complete the “Child 2” or “Child 3” lines only if you adopted or tried to adopt two or three eligible children.

Example 1.

You planned to adopt one U.S. child. You paid $10,000 of qualified adoption expenses in an unsuccessful attempt to adopt a child. You later paid $8,000 of additional qualified adoption expenses in a successful adoption of a different child. Complete only the “Child 1” line because you made more than one attempt to adopt one eligible child.

Example 2.

The facts are the same as in Example 1 except that both attempts are unsuccessful and no adoption is ever finalized. Enter $18,000 ($10,000 + $8,000) on the “Child 1” line because you made more than one attempt to adopt one eligible child.

Example 3.

You planned to adopt one U.S. child. You paid $9,000 in qualified adoption expenses in an unsuccessful attempt to adopt a child. You later successfully adopted twins, after paying an additional $24,000 in qualified adoption expenses ($12,000 per child). Enter $21,000 ($9,000 + $12,000) on the “Child 1” line because you made more than one attempt to adopt one eligible child. Enter $12,000 on the “Child 2” line because you made a successful attempt to adopt a second eligible child.

If you filed Form 8839 for a prior year in connection with this adoption, enter your 2013 information on the same line (Child 1, Child 2, or Child 3) that you used in the prior year.

More Than Three Eligible Children

If you adopted or tried to adopt more than three eligible children, fill in and attach as many Forms 8839 as you need to list them. Also, enter “See Attached” to the right of the Caution below line 1.

For Part II, fill in lines 2 through 6 and 10 and 11 for each child. But fill in lines 7 through 9 and 12 through 16 on only one Form 8839. The amount on line 12 of that Form 8839 should be the combined total of the amounts on line 11 of all Forms 8839.

For Part III, fill in lines 17 through 20, 22, 26, and 27 for each child. But fill in lines 21, 23 through 25, 28, and 29 on only one Form 8839. The amount on line 21 of that Form 8839 should be the combined total of the amounts on line 20 of all the Forms 8839. The amount on line 28 of that form should be the combined total of the amounts on line 27.

Column (c)

A disabled individual, one who is physically or mentally unable to care for himself or herself, is an eligible child regardless of his or her age at the time of adoption.

Column (d)

A child is a child with special needs if all three of the following statements are true.

  1. The child was a citizen or resident of the United States or its possessions at the time the adoption effort began (U.S. child).

  2. A state (including the District of Columbia) has determined that the child cannot or should not be returned to his or her parents' home.

  3. The state has determined that the child will not be adopted unless assistance is provided to the adoptive parents. Factors used by states to make this determination include:

    1. The child's ethnic background and age,

    2. Whether the child is a member of a minority or sibling group, and

    3. Whether the child has a medical condition or a physical, mental, or emotional handicap.

You may be able to claim an exclusion or credit for the adoption of a U.S. child with special needs even if you did not pay any qualified adoption expenses. See Line 22 and the instructions for Line 5.

For more information, see Tax Topic 607 available at www.irs.gov/taxtopics/tc607.html.

Example 1.

Agency A is the child welfare department of State W. Mark, Rachel, and Janet, brother and sisters, are U.S. children residing in State W. When Mark was 10, Rachel 8, and Janet 6, Agency A removed the children from the home of the biological parents.

After Agency A placed the children in foster care, Agency A determined it would be difficult to place the children for adoption without providing assistance to the adoptive family because of the ages and sibling relationship of the children. Agency A provided the adoptive parents with monthly subsidy payments on behalf of each child. The adoption assistance agreements entered into between Agency A and the adoptive parents are evidence that state W has determined that Mark, Rachel, and Janet are children with special needs and may be used to substantiate the adoptive parents' claim to the adoption tax credit.

Because State W has determined that Mark, Rachel, and Janet are children with special needs, their adoptive parents may claim an adoption tax credit for each child, even if the adoptive parents paid no qualifying adoption expenses, if all other requirements of the credit are met.

Example 2.

Hannah is born in State X. Her biological parents place Hannah for adoption through a private adoption agency and voluntarily relinquish their parental rights. Hannah then is adopted. A medical exam performed shortly after Hannah's birth establishes that Hannah has serious physical disabilities. Hannah is not a child with special needs for purposes of the adoption tax credit because State X has neither removed her from her biological parents nor made a determination that Hannah has special needs. However, Hannah's adoptive parents may claim the adoption tax credit for the qualified adoption expenses they paid in connection with Hannah's adoption, if all other requirements of the credit are met.

Example 3.

Noah is born in Country Z and is diagnosed with serious physical and mental disabilities. Noah's adoptive parents, who are residents of State Y, adopt Noah in Country Z, bring him to the United States, and re-adopt him in State Y. Noah is not a child with special needs for purposes of the adoption tax credit because he was not a citizen or resident of the United States when the adoption process began and because State Y neither removed him from the home of his biological parents nor made a determination that Noah has special needs. However, Noah's adoptive parents may claim the adoption tax credit for the qualified adoption expenses they paid in connection with Noah's adoption, if all other requirements of the credit are met.

If you check the box in column (d) indicating the child has special needs, be sure to keep evidence of the state's determination in your records.

Column (e)

A child is a foreign child if he or she was not a citizen or resident of the United States or its possessions at the time the adoption effort began.

Special rules.   If you paid qualified adoption expenses in 2013 or any prior year in connection with the adoption of a foreign child and the adoption became final in 2013, you can use the total expenses you paid in 2013 and all prior years in determining the amount to enter on line 5. If you and another person (other than your spouse if filing jointly) each paid qualified adoption expenses to adopt the same child, the total qualified expenses must be divided between the two of you. You can divide it in any way you both agree.

Exclusion of Prior Year Benefits Worksheet  
(for the adoption of a foreign child that became final in 2013)

1. Enter the total employer-provided adoption benefits you received in 2013 and all prior years for the adoption of the foreign child 1.  
2. Enter $12,970. If you and another person (other than your spouse if filing jointly) each received employer-provided adoption benefits in 2013 or any prior year to adopt the same child, see the instructions for line 2 at the end of this worksheet 2.  
3. Enter the smaller of line 1 or line 2 here and on Form 8839, line 17. If necessary, cross out the preprinted amount on line 17 and enter the result above the preprinted amount 3.  
Next:    
 
  • Enter -0- on Form 8839, line 18.

  • Enter the amount from line 3 of this worksheet on Form 8839, line 19.

  • On Form 8839, line 20, enter the total amount of employer-provided adoption benefits received in 2013 and all prior years. On the dotted line next to line 20, enter “PYAB” and the total amount of benefits you received before 2013.

  • Complete Form 8839 through line 28. Then, complete lines 4 through 9 of this worksheet to figure the amount of any prior year benefits you can exclude and the taxable benefits, if any, to enter on Form 8839, line 29.

   
4. Is the amount on your 2013 Form 8839, line 28, less than the amount on Form 8839, line 21?    
  □ No. Skip lines 4 through 6 of this worksheet and go to line 7.    
  □ Yes. Subtract Form 8839, line 28 from line 21 4.  
5. Enter the total employer-provided adoption benefits you received before 2013 included on Form 8839, line 20, for all children 5.  
6. Taxable benefits. Subtract line 5 of this worksheet from line 4. If zero or less, enter -0-. Enter the result here and on Form 8839, line 29. If more than zero, also include this amount on line 7 of Form 1040 or line 8 of Form 1040NR, and enter “AB” on the dotted line 6.  
7. Enter the amount from Form 8839, line 28 7.  
8. Enter the total 2013 employer-provided adoption benefits included on Form 8839, line 20, for all children 8.  
9. Prior year excluded benefits. Subtract line 8 of this worksheet from line 7. If zero or less, stop; you cannot exclude any of your prior year benefits 9.  
  Next. Figure the total you would enter on line 7 of Form 1040 or line 8 of Form 1040NR before you exclude the amount from line 9 of this worksheet. Then, subtract the amount from line 9 of this worksheet from that total. Enter the result on line 7 of Form 1040 or line 8 of Form 1040NR. On the dotted line next to the line for wages, enter “PYAB” and the amount from line 9 of this worksheet.
Line 2. The maximum amount of employer-provided adoption benefits that can be excluded from income is $12,970 per child. If you and another person (other than your spouse if filing jointly) each received employer-provided adoption benefits to adopt the same child, the $12,970 limit must be divided between the two of you. You can divide it in any way you both agree. Enter your share of the $12,970 limit on line 2 of this worksheet.
  If the adoption did not become final by the end of 2013, you cannot take the adoption credit for that child in 2013.

  In general, the year of finality of a foreign adoption is determined either under Rev. Proc. 2005-31, I.R.B. 2005-31, 2005-26 1374, available at www.irs.gov/irb/2005-26_IRB/ar14.html (non-Hague adoptions) or under Rev. Proc. 2010-31, 2010-41 I.R.B. 413, available at www.irs.gov/irb/2010-40_IRB/ar10.html (Hague adoptions).

Non-Hague adoptions.

In most non-Hague adoptions, there is an adoption proceeding in the foreign country (and the country is one that is not a party to the Hague Adoption Convention, discussed later) before the child is permitted to come to the United States. There may also be a re-adoption proceeding in the United States, either in the same year as the foreign adoption or in a later year. Rev. Proc. 2005-31 generally allows taxpayers to choose as the year of finality: (1) the year of the foreign-sending country adoption proceeding, or (2) the year of the re-adoption, if the re-adoption occurs in either the first or second year following the year of the foreign-country proceeding. The expenses of re-adoption are qualified adoption expenses in the year in which the expenses are paid, subject to the dollar limitation.

Example.

Brian and Susan paid qualified adoption expenses of $7,000 in 2010, $8,000 in 2011, and $ 9,000 in 2012 in connection with the adoption of an eligible foreign child from Country X. Country X is a non-Hague country (a country not party to the Hague Adoption Convention). In 2012, Country X issued a final decree of adoption to Brian and Susan, who brought the child to the United States on an IR2, IR3, or IR4 visa. In 2013, Brian and Susan paid $1,000 in qualified adoption expenses in connection with re-adopting the child in their home state. Brian and Susan's modified gross income (MAGI) is less than the MAGI limitation in all years.

Under Rev. Proc. 2005-31, Brian and Susan may treat 2012 (the year of the adoption in Country X) or 2013 (the year of re-adoption in the United States) as the year of finality. If Brian and Susan choose 2012, then the $24,000 of aggregate qualified adoption expenses paid in 2010, 2011, and 2012 ($7,000 plus $8,000 plus $9,000) will be treated as paid in 2012. The credit will be limited to $12,650 (the dollar limitation for 2012).

Brian and Susan instead may choose to treat 2013 (the year of re-adoption in the United States) as the year of finality. If Brian and Susan choose 2013, then the $25,000 of aggregate qualified adoption expenses paid ($24,000 total from 2010, 2011, and 2012, plus the $1,000 of re-adoption expenses paid in 2013) will be treated as paid in 2013. The credit will be limited to $12,970 (the dollar limitation for 2013).

Hague adoptions.

In Hague adoptions, there is usually an adoption proceeding in the sending country (and the country is one that is a party to the Hague Adoption Convention, discussed later) before the child is permitted to come to the United States. Rev. Proc. 2010-31 generally allows taxpayers to choose as the year of finality: (1) the year in which the sending country enters a final decree of adoption, or (2) the year in which the U.S. Secretary of State issues a certificate under section 301(a) of the Intercountry Adoption Act of 2000, 42 U.S.C. sections 14901 - 14954.

Custodial agreements followed by adoption in the United States.

In a few cases, the sending country may permit the child to come to the United States under a custodial agreement. If so, the child will be adopted later in a state court in the United States. Both Rev. Proc. 2005-31 and Rev. Proc. 2010-31 allow the adoptive parent(s) to treat the year of the state-court adoption as the year of finality.

  
The Hague Convention on Protection of Children and Co-operation in Respect of Intercountry Adoption (Hague Adoption Convention) entered into force for the United States on April 1, 2008. The Hague Adoption Convention applies if you adopted a child from a country that is party to the Hague Adoption Convention and you filed your application and petition (Forms I-800A and I-800) with the U.S. Citizenship and Immigration Service after March 31, 2008. See www.adoption.state.gov for more information on the Hague Adoption Convention, the application and petition, and a complete list of countries that are parties to the Convention.

  If you received employer-provided adoption benefits in 2013 in connection with the adoption of a foreign child and the adoption did not become final by the end of 2013, you must include the benefits in the total entered on Form 1040, line 7, or Form 1040NR, line 8. Also, enter “AB” on the dotted line next to Form 1040, line 7, or Form 1040NR, line 8.

Exclusion of prior year benefits.

If you received employer-provided adoption benefits before 2013 in connection with the adoption of a foreign child and the adoption became final in 2013, you may be able to exclude part or all of those benefits from your 2013 income. To find out if you can, complete the Exclusion of Prior Year Benefits Worksheet . You also must use that worksheet to complete Form 8839, Part III, and to figure any taxable benefits to enter on Form 8839, line 29.

If the adoption of more than one eligible foreign child became final in 2013, complete lines 1 through 3 of the Exclusion of Prior Year Benefits Worksheet separately for each foreign child and use the combined totals to complete lines 4 through 9 of the worksheet.

If you check the box in column (e), you must also check the box in column (g), indicating the adoption was finalized in 2013 or earlier.

Column (f)

Enter the child's identifying number. This can be a social security number (SSN), an adoption taxpayer identification number (ATIN), or an individual taxpayer identification number (ITIN).

Enter the child's SSN if the child has an SSN or you will be able to get an SSN in time to file your tax return. Apply for an SSN using Form SS-5.

If you are in the process of adopting a child who is a U.S. citizen or resident alien but you cannot get an SSN for the child in time to file your return, apply for an ATIN using Form W-7A. However, if the child is not a U.S. citizen or resident alien, apply instead for an ITIN using Form W-7.

Column (g)

Check the box in column (g) if the adoption for each child became final in 2013 or earlier.

Part II—Adoption CreditLine 2

The maximum adoption credit is $12,970 per child. If you and another person (other than your spouse if filing jointly) each paid qualified adoption expenses to adopt the same child, the $12,970 limit must be divided between the two of you. You can divide it in any way you both agree. Cross out the preprinted entry on line 2 and enter above line 2 your share of the $12,970 limit for that child.

Line 3

If you filed Form 8839 for a prior year for the same child, enter on line 3 the total of the amounts shown on lines 3 and 6 (or corresponding line) of the last form you filed for the child.

Line 5

Special rules apply if you paid expenses in connection with the adoption of an eligible foreign child. See Column (e), earlier, for details.

Enter on line 5 the total qualified adoption expenses (as defined earlier) you paid in:

  • 2012 if the adoption was not final by the end of 2013,

  • 2012 and 2013 if the adoption became final in 2013, or

  • 2013 if the adoption became final before 2013.

Expenses reimbursed by your employer under a written qualified adoption assistance program are not qualified adoption expenses and must not be entered on line 5. See the examples following Employer-Provided Adoption Benefits, earlier.

Special needs adoption.   If you adopted a U.S. child with special needs and the adoption became final in 2013, enter on line 5:
  • $12,970, minus

  • Any qualified adoption expenses you used to figure any adoption credit you claimed for the same child in a prior year. This is the amount you entered on line 3 of Form 8839 for this child.

  If you did not claim any adoption credit for the child in a prior year, enter $12,970 on line 5 even if your qualified adoption expenses for the child were less than $12,970 (and even if you did not have any qualified adoption expenses for this child).

Unsuccessful adoption.   If you paid qualified adoption expenses in an attempt to adopt a U.S. child and the attempt was unsuccessful, treat those expenses in the same manner as expenses you paid for adoptions not final by the end of the year.

Example.

You paid $3,000 of qualified adoption expenses in 2012 in an attempt to adopt a U.S. child. You paid $2,000 in qualified adoption expenses early in 2013. However, the adoption attempt was unsuccessful. Enter $3,000 on line 5. The $2,000 paid in 2013 may qualify in 2014.

Line 7

Use the following chart to find your modified adjusted gross income to enter on line 7.

IF you file. . . THEN enter on line 7 the amount from. . .
Form 1040 Form 1040, line 38, increased by the total of any:
 
  • Exclusion of income from Puerto Rico and

  • Amounts from–

   
  • Form 2555, lines 45 and 50,

  • Form 2555-EZ, line 18, and

  • Form 4563, line 15.

Form 1040NR Form 1040NR, line 37.

Line 13

Complete the following worksheet to determine if you have an adoption credit carryforward from 2012.

2012 to 2013 Credit Carryforward Worksheet—Line 13

1. Enter the amount from line 1 of the Credit Limit Worksheet in the 2012 instructions for Form 8839  
2. Enter the amount from line 5 of the Credit Limit Worksheet in the 2012 instructions for Form 8839  
3. Is line 2 smaller than line 1?  
  No. You have no credit carryforward to 2013.  
  Yes. Subtract line 2 from line 1. Enter this amount on your 2013 Form 8839, line 13. This is your credit carryforward to 2013  

Line 15

Complete the credit limit worksheet to figure the limit of your nonrefundable adoption credit.

Credit Limit Worksheet—Line 15

1. Enter the amount from Form 8839, line 14    
2 Enter the amount from Form 1040, line 46, or Form 1040NR, line 44    
3. 1040 filers: Enter the total of any amounts from Form 1040, lines 47 through 50; Form 5695, line 30; line 12 of the Line 11 Worksheet in Pub. 972; Form 8396, line 9; Form 8910, line 15; Form 8936, line 23; and Schedule R, line 22    
  1040NR filers: Enter the total of any amounts from Form 1040NR, lines 45 through 47; Form 5695, line 30; line 12 of the Line 11 Worksheet in Pub. 972; Form 8396, line 9; Form 8910, line 15; and Form 8936, line 23
4. Subtract line 3 from line 2    
5. Enter the smaller of line 1 or line 4 here and on Form 8839, line 15    

If you are not claiming the child tax credit for 2013, you do not need Pub. 972.

Line 16—Credit Carryforward to 2014

If Form 8839, line 15 is smaller than line 14, you may have an unused credit to carry forward to the next 5 years or until used, whichever comes first. Use the Adoption Credit Carryforward Worksheet to figure the amount of your credit carryforward. If you have any unused credit to carry forward to 2014, be sure you keep the worksheet. You will need it to figure your credit for 2014.

Adoption Credit Carryforward Worksheet—Line 16

1. Enter the amount from line 1 of the Credit Limit Worksheet  
2. Enter the amount from Form 8839, line 16  
3. Subtract line 2 from line 1  
4. Do you have a carryforward from 2012? See the 2012 to 2013 Credit Carryforward Worksheet to determine if you had a carryforward from 2012.  
  No. Stop here. The amount of line 3 above is your carryforward to 2014.  
  Yes. Enter the amount from Form 8839, line 13  
5. If line 4 above is equal to or less than line 2, enter -0-. If line 4 is more than line 2, subtract line 2 from line 4  
6. Subtract line 5 from line 3. If the result is zero, enter -0-  
Note. The amount on line 5 is your 2012 credit carryforward to 2014. The amount on line 6, if more than zero, is your 2013 credit carryforward to 2014. You will need these amounts when preparing your 2014 Form 8839.

Part III—Employer-Provided Adoption BenefitsLine 17

The maximum amount that can be excluded from income for employer-provided adoption benefits is $12,970 per child. If you and another person (other than your spouse if filing jointly) each received employer-provided adoption benefits in connection with the adoption of the same eligible child, the $12,970 limit must be divided between the two of you. You can divide it in any way you both agree. Cross out the preprinted entry on line 17 and enter above line 17 your share of the $12,970 limit for that child.

Line 18

If you received employer-provided adoption benefits in a prior year for the same child, enter on line 18 the total of the amounts shown on lines 18 and 22 (or corresponding lines) of the last Form 8839 you filed for the child.

Special rules apply if the prior year benefits were received in connection with the adoption of a foreign child and the adoption became final in 2013. See Exclusion of prior year benefits, earlier.

Line 22

If the child was a child with special needs and the adoption became final in 2013, enter the amount from line 19 only if your employer has a qualified adoption assistance program, as defined earlier under Employer-Provided Adoption Benefits. This requirement applies whether or not you received any employer-provided adoption benefits under this plan.

If your employer has no qualified adoption assistance program, you must enter the smaller of line 19 or line 20.

Line 23

Use the following worksheet to figure your modified adjusted gross income.

Your modified adjusted gross income (MAGI) for the adoption credit may not be the same as the MAGI figured in the following worksheet. If you are taking the credit, be sure to read Line 7 before you enter an amount on that line.

Modified Adjusted Gross Income (MAGI) Worksheet—Line 23

Before you begin:

  • If you file Form 1040, complete lines 8a through 21, 23 through 32, and 36 if they apply.

  • If you file Form 1040NR, complete lines 9a through 21, 24 through 32, and 35 if they apply.

1. Enter the amount you would enter on line 7 of Form 1040 or line 8 of Form 1040NR if you could exclude the total amount on Form 8839, line 21 1.  
2. Enter the amount from Form 8839, line 21 2.  
3. Form 1040 filers, enter the total of lines 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, 20b, and 21. Form 1040NR filers, enter the total of lines 9a, 10a, 11 through 15, 16b, 17b, and 18 through 21 3.  
4. Add lines 1, 2, and 3 4.  
5. Form 1040 filers, enter the total of lines 23 through 32, and any write-in adjustments entered on the dotted line next to line 36. Form 1040NR filers, enter the total of lines 24 through 32 and any write-in adjustments entered on the dotted line next to line 35. 5.  
6. Subtract line 5 from line 4 6.  
  Form 1040 filers, increase the amount on line 6 of this worksheet by the total of the following amounts. Enter the total on Form 8839, line 23.  
• Any amount from Form 2555, lines 45 and 50, Form 2555-EZ, line 18, and Form 4563, line 15, and  
• Any exclusion of income from Puerto Rico.
   
  Form 1040NR filers, enter on Form 8839, line 23, the amount from line 6 of this worksheet.    


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