A nonrefundable tax credit is available for qualified adoption expenses paid to adopt an eligible child. The credit also may be allowed for the adoption of a child with special needs, even if you do not have any qualified expenses. The credit is reduced for certain taxpayers with modified adjusted gross income (MAGI) over $210,000.

In addition to the credit, there is an income exclusion available for employer-provided adoption benefits received.

Both the credit and the exclusion are figured on Form 8839, Qualified Adoption Expenses.