Adoption Tax Credit 2026: Maximum Credit, Refundable Part and Calculator
For tax year 2026, the adoption tax credit is worth up to $17,670 per child, and up to $5,120 of it is refundable. It begins to phase out when modified adjusted gross income is above $265,080 and is gone at $305,080 or more. Enter your expenses, income and tax below to see the credit after the phase-out, the refundable part, the part that offsets your tax and what carries forward. The page also explains the October 2026 IRS refunds for adoption credit carryforwards, which apply to tax year 2025 only.
Maintained by Archie Chang · Sources checked against IRS and statute text on October 30, 2026 · Methodology & sources
Adoption tax credit calculator
Your adoption and return
Line 3 is the total of lines 3 and 6 of the last Form 8839 you filed for the child. It counts expenses, before any income phase-out, not the credit you received.
Enter only a carryforward that has not expired: it lasts 5 years, oldest first. The starting numbers are an example. Replace them with yours. One child at a time.
Your estimated credit
Credit allowed after the income phase-out (Form 8839 line 11a)
$17,670
An estimate for 2026: the limit is $17,670 per child, and the phase-out runs from $265,080 to $305,080 of MAGI.
- Refundable part (limit $5,120)
- $5,120
- Nonrefundable part used against your tax
- $10,000
- Carried forward to 2027
- $2,550
- Total credit this year
- $15,120
$2,330 of your qualified expenses are above the $17,670 left for this child and cannot be claimed in any year.
| Form 8839 line | Amount |
|---|---|
| 2. Maximum credit per child | $17,670 |
| 3. Expenses used on earlier forms | $0 |
| 4. Left for this child (line 2 minus line 3) | $17,670 |
| 5. Qualified expenses (a special needs adoption: line 4) | $20,000 |
| 6. The smaller of line 4 or line 5 | $17,670 |
| 10. Income phase-out reduction (0.00000 of line 6) | $0 |
| 11a. Credit after the phase-out | $17,670 |
| 13. Refundable credit | $5,120 |
| 14. Left for the nonrefundable credit | $12,550 |
| 15. Carryforward from earlier years | $0 |
| 16. Lines 14 and 15 together | $12,550 |
| 17. Tax limit (the smaller of line 16 and the tax you entered) | $10,000 |
| 18. Nonrefundable credit (the smaller of line 16 or 17) | $10,000 |
| Carried forward (line 16 minus line 18) | $2,550 |
This is an estimate that follows the 2025 Form 8839 line by line in whole dollars. For 2026 the dollar amounts come from the IRS, and the form lines are those of the 2025 Form 8839. The IRS decides the actual credit.
Adoption tax credit amounts for 2025 and 2026
| Item | 2025 | 2026 |
|---|---|---|
| Maximum credit per child (also the special needs amount) | $17,280 | $17,670 |
| Refundable part, per child | $5,000 | $5,120 |
| Phase-out begins when MAGI is above | $259,190 | $265,080 |
| Completely phased out at MAGI of | $299,190 or more | $305,080 or more |
| Employer adoption assistance exclusion limit (26 U.S.C. 137) | $17,280 | $17,670 |
| Source | Rev. Proc. 2024-40, sections 2.04 and 2.19; the $5,000 is in 26 U.S.C. 23(a)(4) | Rev. Proc. 2025-32, sections 4.04 and 4.18 |
The 2027 amounts are not yet published. As of October 30, 2026 the IRS has not issued its 2027 inflation adjustments, and this page does not estimate them. The 2026 amounts are in Revenue Procedure 2025-32. Rev. Proc. 2024-40 gives the 2025 amounts:
“For taxable years beginning in 2025, under § 23(b)(1) the maximum credit allowed for other adoptions is the amount of qualified adoption expenses up to $17,280.”
“The available adoption credit begins to phase out under § 23(b)(2)(A) for taxpayers with modified adjusted gross income in excess of $259,190 and is completely phased out for taxpayers with modified adjusted gross income of $299,190 or more.”
and Rev. Proc. 2025-32 gives the 2026 amounts:
“For taxable years beginning in 2026, under § 23(b)(1), the maximum credit allowed for other adoptions is the amount of qualified adoption expenses up to $17,670.”
“The available adoption credit begins to phase out under § 23(b)(2)(A) for taxpayers with modified adjusted gross income in excess of $265,080 and is completely phased out for taxpayers with modified adjusted gross income of $305,080 or more.”
“For taxable years beginning in 2026, the amount used in § 23(a)(4) to determine the amount of the credit under § 23 that may be refundable is $5,120.”
The IRS adoption credit page repeats the 2026 figures:
“Qualified adoption expenses are limited to $17,670 per qualifying child.”
“Up to $5,120 is refundable per qualifying child. You must complete Schedule 3-A (Form 1040), Federal Public Benefit, if you are claiming the refundable Adoption Credit.”
“You may carry forward the non-refundable portion of the credit for a maximum of 5 years.”
“Any remaining non-refundable portion after 5 years is forfeited.”
Where the refundable part comes from
Public Law 119-21 (July 4, 2025), section 70402, added the refundable portion to the credit and made its amendments apply to taxable years beginning after December 31, 2024, so the first year is 2025. The statute now reads:
“So much of the credit allowed under paragraph (1) as does not exceed $5,000 shall be treated as a credit allowed under subpart C and not as a credit allowed under this subpart.”
The Revenue Procedure says the $5,000 is indexed, starting after 2025:
“This amount is adjusted for inflation for taxable years beginning after December 31, 2025.”
The Form 8839 instructions add that it is figured for each child:
“Up to $5,000 of your adoption credit may be refundable.”
“The amount of the refundable credit portion is determined separately for each eligible child.”
The credit limit is also per child, not per year, as the IRS says:
“Additionally, the maximum credit amount applies to the adoption of each child individually, not each calendar year.”
How the credit works, step by step
The IRS describes the credit and its link to employer benefits this way:
“If you adopt an eligible child, you may be able to claim the Adoption Credit and/or income exclusion for employer-provided adoption benefits.”
“You can claim both the credit and income exclusion, but you can’t claim both for the same qualifying expenses.”
- Employer benefits first. The IRS says:
“You must claim any allowable exclusion before claiming any allowable credit.”
IRS, Adoption credit - Expenses used in earlier years. For the same child, the limit is reduced by what an earlier Form 8839 already used:
“If you filed Form 8839 for a prior year for the same child, enter on line 3 the total of the amounts shown on lines 3 and 6 (or corresponding line) of the last form you filed for the child.”
IRS, Instructions for Form 8839 (2025) - Income phase-out. Form 8839 line 8 subtracts the start of the range from your MAGI, and line 9 divides the result by $40,000, rounded to at least three places and not more than 1.000. Line 10 multiplies the expense amount on line 6 by that decimal and subtracts it, so the credit shrinks in proportion to the excess, from the full amount at the start of the range to zero at the end. Example for 2026: at $285,080 of MAGI the excess is $20,000, the decimal is 0.500, and a $17,670 credit becomes $8,835.
- Refundable part first. Per child, the smaller of the credit after the phase-out or the refundable limit ($5,000 for 2025, $5,120 for 2026) goes on Form 1040 line 30 as a refundable credit.
- The rest offsets your tax. The nonrefundable credit is the smaller of what is left plus any carryforward, and the tax you owe after the other credits on the Credit Limit Worksheet. Whatever is unused carries forward.
The Form 8839 instructions work an example for tax year 2025 with a tax limit that allows $10,000 of nonrefundable credit:
“In 2025, you paid $20,000 in qualified adoption expenses for the adoption of an eligible child.”
“You claim a $5,000 refundable adoption credit on Form 8839, line 13, and on Form 1040, line 30.”
“You claim a $10,000 nonrefundable adoption credit on Form 8839, line 18, and on Schedule 3 (Form 1040), line 6c.”
“The remaining $2,280 of qualified adoption expenses that aren’t more than the maximum amount of qualified adoption expenses per eligible child ($17,280 - $10,000 - $5,000) can be carried forward as a nonrefundable adoption credit to the next five years or until used, whichever comes first.”
“You can’t claim any of the $2,280 carryforward as a refundable adoption credit since the carryforward remains a nonrefundable credit.”
“The remaining $2,720 of qualified adoption expenses ($20,000 - $17,280) may never be claimed as a credit.”
Carryforward rules
The statute carries forward only the part of the credit that is not refundable, and limits it to five years, oldest credits first:
“If the portion of the credit allowable under subsection (a) which is allowed under this subpart for any taxable year exceeds the limitation imposed by section 26(a) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section and section 25D), such excess shall be carried to the succeeding taxable year and added to the portion of the credit allowable under subsection (a) which is allowed under this subpart for such taxable year.”
“No credit may be carried forward under this subsection to any taxable year following the fifth taxable year after the taxable year in which the credit arose. For purposes of the preceding sentence, credits shall be treated as used on a first-in first-out basis.”
The instructions for the 2025 return say:
“If Form 8839, line 17, is smaller than line 16, you may have an unused nonrefundable credit to carry forward to the next 5 years or until used, whichever comes first.”
“If you have any unused nonrefundable credit to carry forward to 2026, be sure you keep the worksheet.”
“Any amount of the carryforward credit from 2024 remains a nonrefundable credit.”
For the IRS’s one-time 2025 treatment of these carryforwards, see the section on the October 2026 refunds below.
Married taxpayers
“If married, generally you must file jointly to claim the credit. However, there is an exception for married persons not filing jointly if certain criteria is met; you can amend past returns to change your filing status if needed.”
“You may qualify if you’re a registered domestic partner in a state that allows second-parent adoption. However, you cannot claim the credit for expenses related to adopting your spouse’s child.”
Expenses that do not count
The IRS adoption credit page lists these as expenses that do not qualify: expenses to adopt your spouse’s child, expenses for a surrogate parent arrangement, expenses allowed for another federal tax credit or deduction, expenses paid by a federal, state or local program, expenses reimbursed by your employer, and expenses that violate state or federal law. Qualified expenses include adoption fees, attorney fees, court costs, travel expenses (including meals and lodging) while away from home, and expenses paid before identifying an eligible child, such as home study fees.
The IRS refunds for adoption credit carryforwards (October 2026)
The IRS announced the refunds in news release IR-2026-123 on October 16, 2026. It is a one-time treatment of tax year 2025, not a flat $5,000 refund for every adopting family. What the IRS said:
“The Internal Revenue Service has already begun issuing refunds to more than 50,000 taxpayers who benefited from the adoption tax credit carryforward and expects the refund process for most eligible taxpayers to be complete by the end of the year.”
“Under the new interpretation, for tax year 2025 only, adoption tax credit carryforwards from prior tax years (2020-2024) can increase the amount of the adoption tax credit that is refundable in 2025, subject to the $5,000 per qualifying child limitation.”
Is it a $5,000 refund?
Not for everyone. The $5,000 is a ceiling per child on the refundable part of the credit, and the IRS’s own answer to this question is:
“For 2025, the refundable portion of the adoption credit is limited to $5,000 per eligible child.”
“Your actual refund depends on your allowable adoption credit, prior-year adoption credit carryforwards available for use in 2025, the number of eligible children, income limitations, other adoption credit rules, payments, other credits, and any balance due or offset on your account.”
“The adjustment may result in a refund of less than the maximum refundable amount, a reduced balance due, or no refund.”
Who gets it, and when
You need a carryforward from an earlier year. For example, credit left unused in 2024 because of the tax limit was carried to 2025, where it stayed nonrefundable under the Form 8839 instructions. For tax year 2025 only, the IRS says such carryforwards may be included in determining the refundable portion, and it is adjusting certain taxpayers’ accounts. The IRS says:
“Unused adoption tax credits can be carried forward for up to 5 years.”
“When you have adoption credit carryforwards from more than one year, the oldest carryforward is used first.”
“Adoption credit carryforwards from before 2020 have expired and can no longer be claimed.”
“If your return did not include your prior-year adoption credit carryforward, the IRS may not have enough information to make the systemic adjustment. You may need to file an amended return to correct your adoption credit carryforward information.”
Timing and what to do:
“Refunds and adjustments began in late September and will continue until complete.”
“Taxpayers who filed their 2025 return before April 15, 2026, will generally receive any applicable adjustment automatically.”
“Taxpayers who filed their returns under an extension or whose accounts have identity theft indicators, freezes, dependency conflicts or other issues will be reviewed later in 2026 after the return is processed or the account issue is resolved.”
“Taxpayers should not need to file an amended return to receive the additional credit.”
“Taxpayers will receive notices from the IRS, generally within 30 days of the adjustment, informing them of the amount and whether the adjustment resulted in a refund or was applied towards another tax or non-tax debt.”
The IRS is not changing the 2025 forms:
“The 2025 forms and instructions will not be updated to reflect this treatment.”
Do not file an amended return only to request this adjustment.
What it means for 2026 and later
“This treatment applies for tax year 2025 only.”
“These FAQs address a special treatment for tax year 2025 only.”
“When preparing your 2026 return, follow the 2026 forms and instructions.”
“If the IRS increases your 2025 refundable adoption credit by including prior-year adoption credit carryforwards available for use in 2025, the amount of adoption credit carryforward available for future years may be reduced.”
To find the corrected carryforward, the Questions and Answers tell you to redo the Nonrefundable Adoption Credit Carryforward Worksheet, line 18, in the 2025 instructions, adding to your 2025 Form 8839 line 18 the amount of the increase in your refundable credit shown on your notice or transcript, not the refund amount on the notice.
Estimated tax penalty
“The IRS will not automatically recompute or abate any estimated tax penalty because of this systemic adoption credit adjustment.”
“If you were charged an estimated tax penalty and you believe the penalty would be reduced or eliminated after taking into account the increased refundable adoption credit, you may request abatement or refund of the penalty.”
“If you no longer have the notice, you may request abatement or refund by filing Form 843, Claim for Refund and Request for Abatement.”
To see how an estimated tax penalty is figured, use the underpayment penalty calculator.
When to claim: domestic, foreign and special needs adoptions
| Type of adoption | When to claim eligible expenses | What to know |
|---|---|---|
| Domestic adoption, finalized | Each year as you incur or pay expenses | Expenses paid before the year the adoption becomes final are claimed the year after the payment; expenses paid in the year it becomes final, or later, are claimed the year of payment. |
| Domestic adoption, still in progress | The year after you incur or pay expenses | If the child is a U.S. citizen or resident, you may claim the credit even if the adoption is unsuccessful. |
| Foreign adoption | The year the adoption becomes final | You can claim all eligible expenses, including past years. Nothing is allowed unless the adoption becomes final. Expenses paid after the adoption is final are claimed in the year of payment. |
| Special needs adoption | The year the adoption becomes final | A state or Indian tribal government must have determined that the child has special needs. You may claim the credit even if you had no qualifying adoption expenses. |
Source: IRS, Adoption credit and the timing tables in the Instructions for Form 8839. The Form 8839 instructions say it this way for a child who is a U.S. citizen or resident and for a foreign child:
“If the eligible child is a U.S. citizen or resident, you can take the adoption credit or exclusion even if the adoption never became final.”
“If the eligible child is a foreign child, you can’t take the adoption credit or exclusion unless the adoption becomes final.”
The instructions define a foreign child as a child who was not a citizen or resident of the United States or its territories at the time the adoption effort began.
Special needs adoptions
The IRS says who decides:
“State and Indian tribal governments determine whether a child has special needs for the purpose of claiming the Adoption Credit.”
A child has special needs for the credit only if all three of these are true, as the Form 8839 instructions list them:
- The child was a citizen or resident of the United States or its territories when the adoption effort began.
- A state or Indian tribal government has determined that the child can’t or shouldn’t be returned to their parents’ home.
- The state or Indian tribal government has determined that the child won’t be adopted unless assistance is provided to the adoptive parents.
“The state or Indian tribal government must make a determination that a child has special needs before the child is considered to be a child with special needs. A child having a specific factor or condition isn’t enough to establish that the state or Indian tribal government has made a determination of special needs.”
“You may be able to claim an exclusion or credit for the adoption of a U.S. child with special needs even if you didn’t pay any qualified adoption expenses.”
In the calculator, tick the special needs box and the whole limit, less any expenses used on earlier forms, is the amount on line 5, as the Form 8839 instructions direct for an adoption that becomes final this year. The income phase-out and the refundable limit apply as for any other adoption. Keep the state or tribal determination, for example an adoption assistance or subsidy agreement, with your records.
Employer adoption assistance (26 U.S.C. 137)
The exclusion is a separate benefit with its own limit. The statute:
“Gross income of an employee does not include amounts paid or expenses incurred by the employer for qualified adoption expenses in connection with the adoption of a child by an employee if such amounts are furnished pursuant to an adoption assistance program.”
and the 2026 limit in Revenue Procedure 2025-32 is the same dollar figure as the credit:
“For taxable years beginning in 2026, under § 137(b)(1) the maximum amount that can be excluded from an employee's gross income for the amounts paid or expenses incurred by an employer for qualified adoption expenses furnished pursuant to an adoption assistance program for adoptions by the employee is $17,670.”
Employer-paid benefits are shown in box 12 of Form W-2 with code T. The exclusion phases out over the same MAGI range as the credit, $265,080 to $305,080 for 2026. Expenses your employer reimbursed are not qualified expenses for the credit, so enter them in the reimbursed box in the calculator. You complete Part III of Form 8839 before Part II.
How to claim the credit
“Complete Form 8839, Qualified Adoption Expenses, and attach the form to your tax return.”
Form 8839 lists each child in Part I with a Social Security number, an adoption taxpayer identification number (ATIN) or an individual taxpayer identification number (ITIN), and the refundable credit goes on Form 1040 line 30 and the nonrefundable credit on Schedule 3 line 6c in the 2025 forms. If you have more than three eligible children, attach as many Forms 8839 as you need. Keep the adoption documentation for your records, and if you claimed an incorrect amount, file an amended return.
How this estimate is built
Modelling assumptions
These choices are ours, not IRS statements. They are why the result is an estimate:
- The steps follow the lines of the 2025 Form 8839, in whole dollars, for both years. The 2026 dollar amounts are those in Revenue Procedure 2025-32.
- The phase-out decimal is not rounded; the form says to round to at least three places. The reduction is rounded to whole dollars.
- One child at a time. The refundable limit is figured for each child. The tax limit is shared, so enter the tax left for the credit after the other children.
- The tax you enter is line 4 of the Credit Limit Worksheet, taken from your return. The calculator does not figure it.
- A carryforward is added after the phase-out and is not reduced again. You are responsible for entering only carryforwards that have not expired.
- For 2025 with a carryforward, the adjustment estimate pools the 2025 credit and the carryforward, takes the refundable part first up to $5,000, then the tax limit. The IRS has not published a formula beyond its Questions and Answers, so your notice governs.
- Nothing here predicts 2027 amounts.
Frequently asked questions
How much is the adoption tax credit for 2026?
For tax year 2026, qualified adoption expenses are limited to $17,670 per qualifying child (Rev. Proc. 2025-32). The credit begins to phase out when modified adjusted gross income is above $265,080 and is gone at $305,080 or more. The 2025 amounts are $17,280 and a phase-out from $259,190 to $299,190 (Rev. Proc. 2024-40). The IRS has not published 2027 amounts as of October 30, 2026.
How much of the adoption tax credit is refundable?
Since Pub. L. 119-21 (July 4, 2025), so much of the credit as does not exceed $5,000 is treated as a refundable credit under 26 U.S.C. 23(a)(4), for taxable years beginning after December 31, 2024. The $5,000 is adjusted for inflation after 2025, and Rev. Proc. 2025-32 sets it at $5,120 for 2026. It is figured separately for each eligible child. The rest of the credit is nonrefundable, which means it can only reduce the tax you owe, and any unused part carries forward.
Is the IRS sending everyone a $5,000 adoption credit refund?
No. In news release IR-2026-123 (October 16, 2026) the IRS said it had begun issuing refunds to more than 50,000 taxpayers who benefited from the adoption tax credit carryforward. For tax year 2025 only, carryforwards from 2020 through 2024 can increase the refundable part of the 2025 credit, subject to the $5,000 per qualifying child limit. The IRS Questions and Answers say your actual refund depends on your allowable adoption credit, the carryforwards available, the number of eligible children, income limits and your account, and that the adjustment may result in a refund of less than the maximum, a reduced balance due or no refund.
Do I have to file an amended return to get the automatic refund?
Generally no. The IRS says taxpayers should not need to file an amended return to receive the additional credit, and it asks you not to file one solely to request this adjustment. Taxpayers who filed their 2025 return before April 15, 2026 will generally receive any applicable adjustment automatically, and the IRS sends a notice, generally within 30 days of the adjustment. Returns filed under an extension, and accounts with identity theft indicators, freezes, dependency conflicts or other issues, will be reviewed later in 2026 after the return is processed or the account issue is resolved. If your return did not include your carryforward, the IRS may not have enough information to adjust automatically, and you may need to file an amended return to correct the carryforward information.
Will my carryforward be refundable in 2026 too?
No. The IRS Questions and Answers say they address a special treatment for tax year 2025 only, and that when you prepare your 2026 return you follow the 2026 forms and instructions. If the IRS includes a carryforward in your 2025 refundable credit, the carryforward left for future years may be reduced, so use the corrected figure from your notice when you prepare your 2026 return.
When do I claim the credit for a domestic, foreign or special needs adoption?
For a domestic adoption, expenses paid before the year the adoption becomes final are claimed the year after you pay them, expenses paid in the year it becomes final are claimed that year, and expenses paid later are claimed the year of payment. If the child is a U.S. citizen or resident you may claim the credit even if the adoption is unsuccessful. For a foreign adoption, nothing is allowed unless the adoption becomes final, and then you claim the eligible expenses, including those from past years, in the year it becomes final; expenses paid after the adoption is final are claimed in the year of payment. A special needs adoption is claimed the year it becomes final, even with no qualifying expenses.
Can I take the credit and my employer’s adoption assistance too?
Yes, but not for the same expenses. The IRS says you can claim both the credit and the income exclusion for employer-provided adoption benefits, but you cannot claim both for the same qualifying expenses. The exclusion under 26 U.S.C. 137 has its own limit, $17,670 for 2026 and $17,280 for 2025, with the same income phase-out, and Form 8839 Part III is completed before Part II. Employer-paid amounts are shown in box 12 of Form W-2 with code T.
Is the credit a flat $17,670 per year?
No. The IRS says the maximum credit amount applies to the adoption of each child individually, not each calendar year. If you claimed expenses for the same child in earlier years, those amounts reduce what is left: Form 8839 line 3 is the total of lines 3 and 6 of the last form you filed for the child. Qualified expenses above the limit can never be claimed.
Related tax tools
The credit offsets the tax you figure from the 2026 and 2027 federal tax brackets. If a refund or adjustment changes what you owe, the estimated tax due dates show when quarterly payments are due, and the underpayment penalty calculator estimates the penalty for paying too little. The IRS’s own pages: adoption credit, carryforward questions and answers and Instructions for Form 8839.
Sources (checked October 30, 2026): IRS: news release IR-2026-123, automatic refunds for the adoption tax credit carryforward (Oct. 16, 2026) · IRS: Questions and Answers about Adoption Tax Credit Carryforward · IRS: Adoption credit · IRS: Instructions for Form 8839 (2025) · IRS: Form 8839, Qualified Adoption Expenses (2025) · IRS: Rev. Proc. 2025-32 (2026 inflation adjustments; sections 2, 4.04 and 4.18) · IRS: Rev. Proc. 2024-40 (2025 inflation adjustments; sections 2.04 and 2.19) · Public Law 119-21 (July 4, 2025), section 70402, on govinfo.gov · 26 U.S.C. 23: adoption expenses (Cornell LII, current text; the govinfo edition for 2025 is not yet published) · 26 U.S.C. 137: adoption assistance programs (Cornell LII)