Adoption Credit Flashcards
Bettie and Tony legally adopted a foster child with special needs on February 1, 2023. The child is a U.S. citizen. Their total out-of-pocket adoption expenses totaled $4,300, none of which were reimbursed. What is the maximum amount of her adoption credit?
A. $15,950correct
B. $4,300wrong
C. $2,000
D. $16,550
For adoptions finalized in 2023, there is a federal adoption tax credit of up to $15,950 per child. Bettie and Tony adopted a child with special needs, which means that they can claim the full adoption credit, even though their actual expenses are much less. The adoption credit is not refundable, however. So if they cannot use up the entire credit in the current year, any excess of tax liability may be carried forward for up to five years.
