Georgia Adoption Tax Credit 2025
If you’re exploring adoption in Georgia, understanding the available tax benefits can make a meaningful difference in managing adoption expenses. One of the most valuable tools available to hopeful adoptive families is the adoption tax credit.
Whether you're adopting through foster care, an agency, or privately, this guide breaks down how the credit works, who qualifies, and how to claim it—both at the federal and state levels. By taking advantage of these financial benefits, families can receive support for expenses such as agency fees, legal costs, and travel expenses, making adoption more accessible and affordable.
If you’re ready to learn more about adoption in Georgia or need assistance navigating the financial help available, contact American Adoptions of Georgia today to speak with an adoption specialist.
What is the Adoption Tax Credit?
The federal adoption tax credit is a financial benefit provided to adoptive parents to help offset the costs of adoption. For the 2025 tax year, families may be eligible to claim up to $15,000 in qualified adoption expenses per child.
What Expenses Are Covered?
- Agency and placement fees
- Legal and court costs
- Home study fees
- Travel and lodging related to the adoption
- Adoption-related counseling
Who Qualifies for the Adoption Tax Credit?
- You must have incurred qualified adoption expenses.
- The adoption must be finalized (in most cases) to claim the credit.
- The adopted child must be under 18, or physically or mentally incapable of self-care.
- Income limits apply—your credit begins to phase out at an adjusted gross income (AGI) of approximately $239,230 and phases out completely at $279,230 (2025 figures).
Is the Adoption Tax Credit Refundable?
Currently, the federal adoption tax credit is not refundable. This means the credit can reduce the amount of federal tax you owe to zero, but it will not result in a refund if your tax liability is already low. However, unused portions of the credit can be carried forward for up to five years, allowing families to use the full amount over time.
How to Apply for the Adoption Tax Credit
To claim the federal adoption tax credit, follow these steps:
- Keep Detailed Records
Save all receipts and documentation related to qualified adoption expenses. - File IRS Form 8839
Complete IRS Form 8839, Qualified Adoption Expenses, and attach it to your federal tax return. - Finalize the Adoption (If Applicable)
Most families can only claim the credit in the year the adoption is finalized. Exceptions may apply for special needs or failed adoptions. - Consult a Tax Professional
Because each adoption and tax situation is unique, it’s wise to work with a tax preparer familiar with adoption-related credits.
What About Failed Adoptions?
In certain cases, failed adoptions still qualify for partial tax credits—especially if the expenses were paid for a U.S. adoption and the process was not completed. Consult IRS guidelines or a tax advisor for specifics.
How to Claim the Adoption Tax Deduction in Georgia
Georgia does not currently offer a general adoption tax credit. However, the state does offer a tax deduction specifically for parents who adopt children from the foster care system.
Key Points About the Georgia Adoption Tax Deduction:
- Applies to adoptions finalized through Georgia’s foster care system.
- Adoptive parents may deduct $2,000 per year, per child, from their Georgia state income taxes until the child turns 18.
- This deduction applies only to state taxes, not federal taxes.
Tax Credit vs. Tax Deduction: What's the Difference?
- Tax Credit: Reduces the amount of tax you owe dollar-for-dollar. (More valuable)
- Tax Deduction: Reduces your taxable income, which may lower your total tax owed.
Before applying for a deduction, compare your total itemized deductions to Georgia’s standard deduction. If your total is lower than the standard, itemizing may not benefit you.
Contact American Adoptions of Georgia
Understanding the adoption tax credit and Georgia's foster care adoption deduction can make a real difference in how you plan and budget for your adoption. These financial tools are designed to support families like yours and make adoption more attainable.
If you're ready to begin your adoption journey or want help exploring the financial resources available to you, contact American Adoptions of Georgia today. We’re here to support you every step of the way.
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