The IRS published the Adoption Tax Credit figures and adjustments for 2020. The new maximum dollar amount allowed for the tax credit tax in 2020 is $14,300 per child (it was $14,080 in 2019). The Adoption Tax Credit begins to phase out for those families whose modified adjusted gross income exceeds $214,520, and phases out completely for families with modified adjusted gross income of $254,520 or more (so no tax credit benefit is allowed for families with a modified adjusted gross income above $254,520 for 2020).
The adoption of a “special needs” child qualifies for the full Adoption Tax Credit amount for each child even where no costs or expenses were paid. This tax credit is most commonly taken in the year an adoption is finalized. Check with your accountant or call our office for more details regarding the specific application of this adoption tax benefit in your situation.