Table of Contents
Complete all columns that apply to the eligible child you adopted or tried to adopt. If you do not give correct or complete information your credit and any exclusion may be disallowed.
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 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 on only one Form 8839. The amount on line 1 of the Credit Limit Worksheet in these instructions should be the combined total of the amounts on line 11 of all the Forms 8839.
For Part III, fill in lines 13 through 16, 18, 22, and 23 for each child. But fill in lines 17, 19 through 21, 24, and 25 on only one Form 8839. The amount on line 17 of that Form 8839 should be the combined total of the amounts on line 16 of all the Forms 8839. The amount on line 24 of that form should be the combined total of the amounts on line 23.
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.
A child is a child with special needs if all three of the following statements are true.
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The child was a citizen or resident of the United States or its possessions at the time the adoption effort began (U.S. child).
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A state (including the District of Columbia) has determined that the child cannot or should not be returned to his or her parents' home.
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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:
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The child's ethnic background and age,
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Whether the child is a member of a minority or sibling group, and
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Whether the child has a medical condition or a physical, mental, or emotional handicap.
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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 18 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.
For information and examples on a state determination of special needs, see frequently asked questions on adoption benefits at www.irs.gov/individuals/article/0,,id=231663,00.html.
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.
| 1. | Enter the total employer-provided adoption benefits you received in 2012 and all prior years for the adoption of the foreign child | 1. | |
| 2. | Enter $12,650. If you and another person (other than your spouse if filing jointly) each received employer-provided adoption benefits in 2012 or any prior year to adopt the same child, see instructions below. | 2. | |
| 3. | Enter the smaller of line 1 or line 2 here and on Form 8839, line 13. If necessary, cross out the preprinted amount on line 13 and enter the result above the preprinted amount | 3. | |
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| 4. | Is the amount on your 2012 Form 8839, line 24, less than the amount on Form 8839, line 17? | ||
| □ No. Skip lines 4 through 6 and go to line 7. | |||
| □ Yes. Subtract Form 8839, line 24 from line 17 | 4. | ||
| 5. | Enter the total employer-provided adoption benefits you received before 2012 included on Form 8839, line 16, for all children | 5. | |
| 6. | Taxable benefits. Subtract line 5 from line 4. If zero or less, enter -0-. Enter the result here and on Form 8839, line 25. 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 24 | 7. | |
| 8. | Enter the total 2012 employer-provided adoption benefits included on Form 8839, line 16, for all children | 8. | |
| 9. | Prior year excluded benefits. Subtract line 8 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 above. Then, subtract the amount from line 9 above 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 above. | |||
| Line 2. The maximum amount of employer-provided adoption benefits that can be excluded from income is $12,650 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 $12,650 limit must be divided between the two of you. You can divide it in any way you both agree. Enter your share of the $12,650 limit on line 2 of the worksheet above. |
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.
Brian and Susan paid qualified adoption expenses of $7,000 in 2009, $8,000 in 2010, and $ 9,000 in 2011 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 2011, 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 2012, 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 2011 (the year of the adoption in Country X) or 2012 (the year of re-adoption in the United States) as the year of finality. If Brian and Susan choose 2011, then the $24,000 of aggregate qualified adoption expenses paid in 2009, 2010, and 2011 ($7,000 plus $8,000 plus $9,000) will be treated as paid in 2011. The credit will be limited to $13,360 (the dollar limitation for 2011).
Brian and Susan instead may choose to treat 2012 (the year of re-adoption in the United States) as the year of finality. If Brian and Susan choose 2012, then the $25,000 of aggregate qualified adoption expenses paid ($24,000 total from 2009, 2010, and 2011, plus the $1,000 of re-adoption expenses paid in 2012) will be treated as paid in 2012. The credit will be limited to $12,650 (the dollar limitation for 2012).
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.
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.
If you received employer-provided adoption benefits before 2012 in connection with the adoption of a foreign child and the adoption became final in 2012, you may be able to exclude part or all of those benefits from your 2012 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 25.
If the adoption of more than one eligible foreign child became final in 2012, 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.
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.
The maximum adoption credit is $12,650 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 $12,650 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 $12,650 limit for that child.
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.
Enter on line 5 the total qualified adoption expenses (as defined earlier) you paid in:
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2011 if the adoption was not final by the end of 2012,
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2011 and 2012 if the adoption became final in 2012, or
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2012 if the adoption became final before 2012.
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$12,650, minus
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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.
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. . . | |
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| Form 1040 | Form 1040, line 38, increased by the total of any: | |
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| Form 1040NR | Form 1040NR, line 37. | |
Complete the credit limit worksheet to figure the limit of your nonrefundable adoption credit.
| 1. | Enter the total of the amounts on Form 8839, line 11 | |
| 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 32; line 12 of the Line 11 Worksheet in Pub. 972; Form 8396, line 9; Form 8834, line 23; Form 8910, line 22; 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 32; line 12 of the Line 11 Worksheet in Pub. 972; Form 8396, line 9; Form 8834, line 23; Form 8910, line 22; and Form 8936, line 23. | ||
| 4, | Subtract line 3 from line 2 | |
| 5 | Adoption credit. Enter the smaller of line 1 or line 4 here and on Form 8839, line 12, and on Form 1040, line 53, or Form 1040NR, line 50. Check box c on that line and enter “8839 ” in the space next to box c. |
The maximum amount that can be excluded from income for employer-provided adoption benefits is $12,650 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 $12,650 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 13 and enter above line 13 your share of the $12,650 limit for that child.
If you received employer-provided adoption benefits in a prior year for the same child, enter on line 14 the total of the amounts shown on lines 14 and 18 (or corresponding lines) of the last Form 8839 you filed for the child.
If the child was a child with special needs and the adoption became final in 2012, enter the amount from line 15 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 15 or line 16.
Use the following worksheet to figure your modified adjusted gross income.
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Before you begin:
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| 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 17 | 1. | |
| 2. | Enter the amount from Form 8839, line 17 | 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 above by the total of the following amounts. Enter the total on Form 8839, line 19. • 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. |
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| Form 1040NR filers, enter on Form 8839, line 19, the amount from line 6 above. |
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