TurboTax / Tax Calculators & Tips / All Tax Guides / IRS Tax Forms / What Is IRS Form 8839: Qualified Adoption Expenses?

What Is IRS Form 8839: Qualified Adoption Expenses?

Updated for Tax Year 2016


OVERVIEW

The Internal Revenue Service allows you to offset your tax bill with a credit for your qualified adoption expenses, as long as you meet certain eligibility requirements. To report your qualified adoption expenses, you'll use IRS Form 8839.


If you’ve adopted a child (or attempted to), you know it can be very expensive. The good news is the Internal Revenue Service allows you to offset your tax bill with a credit for your qualified adoption expenses, as long as you meet certain eligibility requirements. To report your qualified adoption expenses, you’ll use IRS Form 8839.

Who is eligible?

If you paid qualified adoption expenses to adopt a child who is a U.S. resident or citizen, then you may be eligible for the credit, even if the adoption hasn’t been finalized or was finalized in a different tax year. You may also qualify for the credit if you paid expenses to adopt a foreign child. Additionally, there are separate rules to claim the credit on Form 8839 if you adopt a child with special needs.

Beginning with the 2012 tax year, federal law reduced the maximum credit for the qualified adoption expenses you incur. For 2016 the maximum credit is $13,4600 per child. In addition, the adoption tax credit is no longer refundable. This means that in order to recognize the full benefit of the credit, your total tax must be at least equal to your credit. For example, if your total tax for the year is only $10,000 but you spend $14,000 in qualified adoption expenses, $10,000 is the most you can save in tax.

Keep in mind, as your income goes up, your eligibility for the credit goes down. For tax year 2016, as long as your modified adjusted gross income is $201,920 or less, you can qualify for the full credit. The credit phases out as your income increases and goes away completely when it exceeds $241,920.

Qualified adoption expenses

Before you begin filling out Form 8839 with your qualified adoption expenses, it’s a good idea to familiarize yourself with the types of expenses the IRS considers qualified. Qualified adoption expenses include:

  • The fees you pay to an adoption agency that facilitates the process
  • Legal fees you pay to an attorney
  • All court costs you incur and re-adoption expenses that relate to the adoption of a foreign child.

You may also include the necessary travel expenses you incur, including the cost of food and hotels when traveling away from home. Keep in mind, however, that you may not include amounts your employer reimburses, fees you pay to a surrogate mother, or any expenses that relate to the adoption of your spouse’s child.

Form 8839 reporting

Once you calculate your qualified adoption expenses, you need to report the total in Part II of Form 8839. You will also need to provide additional information in Part II before calculating the credit. This includes the previous tax years you've taken the credit and the amount of your modified adjusted gross income. 

Keep in mind, when you use TurboTax to prepare your taxes, we’ll ask you simple questions about your adoption expenses, handle all the calculations, and fill in all the right forms for you.

Get every deduction you deserve

TurboTax Deluxe searches more than 350 tax deductions and credits so you get your maximum refund, guaranteed.

For only $54.99$34.99*
Start for Free

Looking for more information?

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.


Security is built into everything we do
Here's how
* Important Offer Details and Disclosures
  • TURBOTAX ONLINE/MOBILE

  • Try for Free/Pay When You File: TurboTax online and mobile pricing is based on your tax situation and varies by product. Free 1040EZ/1040A + Free State offer only available with TurboTax Federal Free Edition; Offer may change or end at any time without notice. Actual prices are determined at the time of print or e-file and are subject to change without notice. Savings and price comparisons based on anticipated price increase expected in March. Special discount offers may not be valid for mobile in-app purchases.
  • QuickBooks Bonus Offer with TurboTax Self-Employed: File your 2016 federal return with TurboTax Self-Employed by 4/18/17 and receive a complimentary subscription to QuickBooks Self-Employed until 4/30/18 at no additional cost. After you file your taxes, you must activate your QuickBooks Self-Employed subscription by 7/15/2017 by logging into QuickBooks Self-Employed via mobile app or at https://selfemployed.intuit.com/login. Once activated, you will have access to QuickBooks Self-Employed until 4/30/2018.
    Offer valid only for new QuickBooks Self-Employed customers.
    • When you use TurboTax Self-Employed to file your 2017 taxes, you will have the option to renew your QuickBooks Self-Employed subscription. If you do not file with TurboTax Self-Employed by 4/30/2018, your QuickBooks Self-Employed subscription will automatically renew on 5/1/2018 for another year at the then-current annual subscription rate. You may cancel your subscription at any time from within the QuickBooks Self-Employed billing section.
  • Pays for itself: In order to pay for the price of TurboTax Self-Employed, you will need at least $600 in deductible business expenses. This calculation is based on the self-employment tax income rate for tax year 2016.
  • Anytime, anywhere: Internet access required; standard message and data rates apply to download and use mobile app.
  • Fastest refund possible: Fastest tax refund with e-file and direct deposit; tax refund time frames will vary.
  • Pay for TurboTax out of your federal refund: $X.XX Refund Processing Service fee applies to this payment method. Prices are subject to change without notice.
  • TurboTax Expert Help, Tax Advice and SmartLook: Included with Deluxe, Premier and Self-Employed (via phone or SmartLook); not included with Federal Free Edition. Feature availability varies by device. State tax advice is free. Service, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2015 TurboTax products.
  • Most Popular: TurboTax Deluxe is our most popular product among TurboTax Online users with more complex tax situations.
  • CompleteCheck: Covered under the TurboTax accurate calculations and maximum refund guarantees.
  • TurboTax Self-Employed Expense Finder: Available only in TurboTax Self-Employed. Not available for people with certain types of expenses and tax situations including paying contractors or employees, home office or vehicle actuals, inventory, self employed health insurance or retirement, asset depreciation, sale of property or vehicles, and farm income. Some financial institutions limit the timeframe for which historical transactions may be imported by ExpenseFinder. ExpenseFinder expected late January (late February for mobile app).
  • TURBOTAX CD/DOWNLOAD SOFTWARE

  • TurboTax CD/Download products: Price includes tax preparation and printing of federal tax returns and free federal e-file of up to 5 federal tax returns. Additional fees apply for e-filing state returns. E-file fees do not apply to New York state returns. Savings and price comparison based on anticipated price increase expected in March. Prices subject to change without notice.
  • Fastest refund possible: Fastest tax refund with e-file and direct deposit; tax refund time frames will vary.
  • Pay for TurboTax out of your federal refund: $X.XX Refund Processing Service fee applies to this payment method. Prices are subject to change without notice. This benefit is available with TurboTax Federal products except TurboTax Business.
  • About our TurboTax Product Experts: Customer service and product support vary by time of year.
  • About our credentialed tax experts: Live tax advice via phone is included with Premier and Home & Business; fees apply for Basic and Deluxe customers. State tax advice is free. Service, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice. Not available for TurboTax Business customers.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2015 TurboTax products.
  • Data Import: Imports financial data from participating companies. Quicken and QuickBooks import not available with TurboTax installed on a Mac. Imports from Quicken (2015 and higher) and QuickBooks Desktop (2011 and higher); both Windows only. Quicken import not available for TurboTax Business. Quicken products provided by Quicken Inc., Quicken import subject to change.