Form 8839 works out the adoption credit and the employer-provided adoption benefits you can exclude from income. For 2025 the maximum credit and the maximum exclusion are each $17,280 per eligible child, and for the first time up to $5,000 of the credit is refundable, so it can be paid to you even if you owe no tax.
Everything below comes from the IRS 2025 Instructions for Form 8839, as of October 2026.
What changed for 2025
This is the insight families most often miss. Before 2025 the whole credit was nonrefundable, so it could only reduce tax you owed and any unused part was carried forward. Now up to $5,000 is refundable, worked out separately for each eligible child, so two children can each bring a refundable portion. Any carryforward from 2024 stays nonrefundable.
The other 2025 change: Indian tribal government determinations of special needs now count alongside state government determinations.
The 2025 limits
| Item | 2025 figure |
|---|---|
| Maximum credit per eligible child (refundable plus nonrefundable) | $17,280 |
| Maximum employer-benefit exclusion per child | $17,280 |
| Refundable portion | Up to $5,000 per eligible child |
| MAGI where the phase-out starts | Above $259,190 |
| MAGI where it's fully phased out | $299,190 or more |
You can claim both the credit and the exclusion for the same adoption, but not for the same expenses. Nonrefundable credit you can't use carries forward for up to 5 years or until it's used up, whichever comes first.
Who's an eligible child and what expenses count
An eligible child is any child under 18, or anyone physically or mentally unable to take care of themselves. Qualified adoption expenses are reasonable and necessary costs directly related to the legal adoption, such as adoption fees, attorney fees, court costs, travel (including meals and lodging) while away from home, and re-adoption costs for a foreign child. They don't include:
- expenses paid with funds from a state, local or federal program
- expenses that violate state or federal law
- costs of a surrogate parenting arrangement
- adopting your spouse's child
- anything reimbursed by your employer or otherwise, or claimed under another tax provision
When you claim it
| Adoption | Expenses paid | Claim the credit in |
|---|---|---|
| US child | In a year before the adoption is final | The following year |
| US child | In the year it becomes final, or later | The year paid |
| US child with special needs, final in 2025 | Even with no expenses | 2025, possibly the full amount |
| Foreign child | 2025 or earlier, adoption final in 2025 | 2025: only once the adoption is final |
A foreign child is one who wasn't a US citizen or resident when the adoption effort began, and neither the credit nor the exclusion is available until that adoption is final.
Employer adoption benefits
Benefits paid under your employer's written qualified adoption assistance program usually appear in box 12 of your Form W-2 with code T. Part III works out the exclusion, and you complete it before the credit in Part II, because reimbursed costs stop being qualified expenses for the credit. The instructions' example: $10,000 of expenses with $4,000 reimbursed leaves a maximum credit of $6,000. If you own more than 2% of an S corporation employer, you can't exclude its adoption benefits.
Special needs adoptions
A US child with special needs gets the most generous treatment. You may be able to exclude up to $17,280 and claim a credit of up to $17,280 for additional expenses, minus any qualified expenses claimed for the same child in an earlier year. The exclusion may be available even if neither you nor your employer paid any qualified adoption expenses, provided your employer has a written qualified adoption assistance program and the adoption became final in 2025. That's why the special needs box in Part I matters so much: it can turn a zero-expense adoption into a full credit.
Filling it in
- Part I: each child's details, including whether the child has special needs or is a foreign child, and an identifying number. Use the child's SSN if the child has one or you can get it in time to file.
- Part III first if you received employer benefits.
- Part II: start from $17,280 on line 2, subtract amounts used for the same child in earlier years, apply the income limit and work out the refundable part on line 13.
- Carry the nonrefundable credit to Schedule 3 (Form 1040) line 6c and the refundable credit to Form 1040 line 30.
Unsuccessful and unfinished adoptions
Expenses for an attempted or unsuccessful adoption of a US child can still count, as can expenses for an adoption that isn't final yet; the line 1 and line 5 instructions explain how. Every eligible child gets their own line in Part I, and the $17,280 limit applies per child, reduced by anything already claimed for that same child in an earlier year. For the identifying number, enter the child's SSN if the child has one or will in time; if you're still adopting a US citizen or resident child who doesn't have one, the instructions cover the alternatives. For the kind of records worth keeping, they point to Notice 2010-66.
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Keep the adoption records. If you and someone other than your spouse both paid expenses for the same child, the $17,280 limit is shared between you.
The verdict
If you finalized an adoption in 2025 or paid adoption costs, file Form 8839 even if you think you won't owe enough tax to use it: the refundable $5,000 per child changes the answer for many families. Track the year each expense was paid against the year the adoption became final, because that decides which return it belongs on.
Frequently asked questions
What is Form 8839 used for?
It figures the adoption credit and any employer-provided adoption benefits you can exclude from income.
How much is the adoption credit for 2025?
Up to $17,280 per eligible child, with up to $5,000 of it refundable.
Is the adoption credit refundable?
Beginning in 2025, up to $5,000 of the adoption credit is refundable, figured per eligible child. A carryforward from 2024 stays nonrefundable.
What is the income limit for the adoption credit?
For 2025 it starts to phase out above $259,190 of modified adjusted gross income and is gone at $299,190 or more.
Can I claim the adoption credit for a foreign adoption that isn't final?
No. For a foreign child, the credit and exclusion are only available once the adoption becomes final.
