Do intercountry adoptions qualify for the adoption tax credit?

The Hope for Children Act applies to all adoptions—both domestic and intercountry. Like current law, in order to claim the tax credit for intercountry adoptions, the adoption must be finalized. For IR-3 visas, finalization usually occurs abroad.

For IR-4 visas, finalization usually occurs in the United States. How does the Hope for Children Act affect special needs adoptions? The $6,000 adoption tax credit for special needs children is permanent law.

However, the tax credit can only be utilized for qualified adoption expenses. While most special needs adoptions are from public agencies and do not have these up-front, ’qualified’ costs, the adopting families face other challenges in opening up their home to special needs children. Thus, the Hope for Children Act provides a flat $10,000 credit for special needs adoptions to help families with one-time and ongoing costs such as mental health counseling, physical therapy and medical costs, transportation costs, and home modifications to ... more.

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