Adopting a Child: The Adoption Tax Credit, Adoption Assistance and Other Help

1Two kinds of help for two kinds of cost

Adoption costs fall into two groups. There are the one-time costs of the adoption itself: agency fees, home studies, court and attorney fees, and travel. And there are the ongoing costs of raising a child, which for children with significant needs can include therapy, medical care and specialized support.

The adoption credit is aimed at the first group and is available for most adoptions except a stepchild's. Adoption assistance under Title IV-E is aimed at the second and is available only for certain children adopted from foster care. Many families adopting from foster care qualify for both.

2The adoption credit

For 2026, the credit can be as much as $17,670 per child, figured from the qualified adoption expenses you paid. Qualified expenses are those reasonable and necessary to the legal adoption of an eligible child: adoption fees, court costs, attorney fees, travel including meals and lodging away from home, and similar costs. They do not include expenses reimbursed by an employer or a government program, costs of a surrogacy arrangement, or the adoption of your spouse's child.

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Until 2025 the credit was entirely nonrefundable, which meant it was of little use to families who owed little income tax. The 2025 law made up to $5,000 of it refundable starting that year, an amount that rises with inflation. The part that is not refundable can be carried forward for up to five years if your tax is too small to use it all.

The limit applies to each child, so a family adopting a sibling group has a separate limit for every child. An eligible child is one under 18, or one of any age who is physically or mentally unable to care for themselves. The limit also covers the whole adoption, not each year: expenses spread over several years, and any failed attempt to adopt before a successful one, count toward the same per-child total.

3The special needs rule

Adoptions of children with special needs are treated more generously. If you adopt a child who is a U.S. citizen or resident and the state has determined that the child has special needs, you can claim the full credit in the year the adoption becomes final, whatever you actually spent. A family that adopts from foster care with almost no expenses can still claim the full $17,670.

Special needs here is a legal determination, not a medical diagnosis. States make it for children they find unlikely to be adopted without assistance, because of factors such as age, membership in a sibling group, ethnic background, or a physical, mental or emotional condition. Your agency or caseworker can tell you whether the determination has been made; ask for it in writing, since you will need it for your tax records.

4When to claim it

Timing depends on where the child comes from. For a domestic adoption, expenses paid before the year the adoption is final are claimed in the year after you pay them, and expenses in the final year are claimed that year; you can claim the credit even if the adoption never becomes final. For an international adoption, you can claim the credit only once the adoption is final, for all expenses paid up to then.

The credit is claimed on Form 8839, Qualified Adoption Expenses. You will need the child's identifying number, which can be a Social Security number or, for a pending adoption, an adoption taxpayer identification number from the IRS. Keep receipts, court documents and any special needs determination. The form is one few people file more than once, so if your return is otherwise simple, a free IRS Volunteer Income Tax Assistance site or a tax professional can check it with you.

5Employer adoption benefits

Some employers pay or reimburse adoption costs. Up to $17,670 of those benefits for 2026 can be excluded from your taxable income, with the same phase-out as the credit. You can use both the exclusion and the credit for the same adoption, but not for the same dollars: expenses paid by your employer cannot also be claimed for the credit. Ask your human resources office whether your plan qualifies and how it reports payments on your Form W-2.

6Adoption assistance for children from foster care

For children adopted from foster care who meet the federal special needs definition and other eligibility rules, Title IV-E of the Social Security Act provides adoption assistance through the state child welfare agency. It can include:

• Monthly payments to help with the child's needs, negotiated with the agency and generally not more than the child would have received in foster care.
• Medicaid coverage for the child, which in most cases continues after the adoption.
• Reimbursement of one-time adoption costs, such as fees and court costs, of up to $2,000 per child, or a lower limit set by the state.

The key rule is timing: the adoption assistance agreement must be signed before the adoption is final. Families who finalize first and ask later can lose eligibility, though there are limited ways to reopen a case. Ask the agency about adoption assistance early, and keep a copy of the agreement. Many states also run their own assistance for children who do not meet the federal rules.

7Other benefits that follow the child

• Health coverage. Adopting or having a child placed for adoption opens a special enrollment period, usually 60 days, to add the child to a job-based or Marketplace plan; see our guide to special enrollment periods.
• Tax benefits for children. An adopted child is treated as your own child for the Child Tax Credit, the Earned Income Tax Credit and the dependent rules, though the Child Tax Credit requires a Social Security number. Our guide to the Child Tax Credit explains the rules.
• Time off. The Family and Medical Leave Act lets eligible employees take up to 12 weeks of job-protected, unpaid leave for the placement of a child for adoption or foster care; see our guide to FMLA.
• Social Security. An adopted child can receive benefits on an adoptive parent's record if the parent retires, becomes disabled or dies, on the same terms as a birth child.

Relatives raising a child without a formal adoption have options of their own, covered in our guide to kinship care.