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Evan and Barbara incurred qualified adoption expenses in 2018 of​ $6,000, and then incurred​ $9,000 more...

Evan and Barbara incurred qualified adoption expenses in 2018 of​ $6,000, and then incurred​ $9,000 more in 2019 when the adoption of their child became final. Their 2018 AGI was​ $110,000 and their 2019 AGI was​ $100,000. The allowable adoption credit is? On Tax Accounting

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Answer #1

As per IRS, the maximum allowable deduction for adoption of child in 2019 tax year is $14,080 per child. This is also subject to income limit,i.e., it starts to phase out for modified adjusted gross income above $211,160 and is completely phased out for income above $251,160.

Further, if any qualified adoption expenses are incurred and claimed in previous year even when the adoption was unsuccessful, same to be deducted from $14,080 limit for claiming adoption tax credit.

So, the income for the couple is not a concern since it is not above $211,160. In 2018, they can claim $6,000. In 2019, they incurred $9,000 more, but they can get credit only on $14,080 - $6,000 already claimed = $8,080.

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