Adoption Tax Credit Table
| Item | 2026 amount | Note |
|---|---|---|
| Maximum credit | $17,670 | per child, qualified expenses up to the cap |
| Special-needs adoption | $17,670 | full amount regardless of actual expenses |
| Phase-out begins | $265,080 | modified AGI (half for MFS) |
| Completely phased out | $305,080 | modified AGI (half for MFS) |
| Refundable portion | $5,120 | excess over tax liability comes back |
The adoption credit offsets qualified adoption expenses dollar-for-dollar up to $17,670 per child in 2026 - and it has two features almost nothing else in the code combines: a special-needs adoption earns the full amount regardless of what you actually spent, and part of the credit is refundable, up to $5,120, even when the tax bill runs out first.
The gate is income: the credit slides ratably from full at $265,080 of modified AGI to zero at $305,080 - a $40,000 window that is per return, not per child, which is why the calculator above matters before you commit to timing.
How to use
- Enter modified AGI and filing status; the chips place a $200k family, the phase-out midpoint, and a past-the-cap family.
- Read the table for the five official 2026 numbers verbatim from Rev. Proc. 2025-32, including the MFS half-window trap.
- Remember the credit is per child: adopting two siblings doubles the cap and the refundable floor in the same year.
Frequently asked questions
What counts as a special-needs adoption for the full credit?
A US child whom the state determines cannot be placed with a family without adoption assistance - the determination, not your expenses, earns the full $17,670. Adopting a special-needs child essentially for free still claims the whole amount; international adoptions never qualify for this rule.
How does the phase-out actually cut the credit?
Ratably: the credit shrinks by 1/40,000th of the maximum per dollar of MAGI above $265,080, reaching zero at $305,080. At the midpoint ($285,080) you keep half. Married filing separately divides both window ends in half - the credit dies at $152,520 - one more reason MFS returns get expensive.
What is the refundable portion?
Up to $5,120 of the credit is refundable: if the credit exceeds your tax liability, that slice comes back as a refund anyway. Families with small tax bills - common in a low-income adoption year - still capture the floor; anything beyond $5,120 carries forward up to five years.
Do employer adoption benefits interact with the credit?
Yes - employer adoption assistance (excluded from income under section 137) shares the same $17,670 cap per child: expenses reimbursed by the employer cannot also feed the credit. Order matters on the paperwork, and the exclusion has its own income rules worth checking on the employer plan.