Section 36C of the United States Internal Revenue code offers a credit for “qualified adoption expenses” paid or incurred by individual taxpayers.
The American Taxpayer Relief Act of 2012 enacted January 2, 2012 permanently extended the adoption tax credit.
[3] The amount of tax credit limit is based on the year the adoption is finalized and claimed on IRS form 8839.
Democratic President Bill Clinton endorsed the idea of an adoption tax credit in a letter to Speaker of the House Newt Gingrich stating the tax credit would ease the cost of adoption for many families.
[7] The Small Business Job Protection Act of 1996 created the adoption tax credit in Internal Revenue Code with an Initial $5,000 tax credit limit ($6,000 for special needs adoptions).
Parents who adopt a child with special needs can claim the full credit without documenting expenses.
[11] A child with special needs has a factor or condition (uniquely defined by each State) that may involve any of the following: These broader definitions of "special needs" may be used to determine eligibility for Federal financial assistance for adoption of children and youth from the U.S. foster care system.
While there's no single Federal definition of special needs, according to title IV-E of the Social Security Act, a child or youth with special needs must also meet the following two requirements to be eligible for Federal adoption assistance: 1.
Financial records include invoices, bank statements, and copies of written checks.
A US social security number and card, a passport, a US birth certificates and US readoption are additional documents that may be needed for a child who permanently resides in the United States.