2017 Adoption Tax Credit Information



Internal Revenue Bulletin:  2016-45

Rev. Proc. 2016–55
.03 Adoption Credit. For taxable years beginning in 2017, under § 23(a)(3) the credit allowed for an adoption of a child with special needs is $13,570. For taxable years beginning in 2017, under § 23(b)(1) the maximum credit allowed for other adoptions is the amount of qualified adoption expenses up to $13,570. The available adoption credit begins to phase out under § 23(b)(2)(A) for taxpayers with modified adjusted gross income in excess of $203,540 and is completely phased out for taxpayers with modified adjusted gross income of $243,540 or more.

.19 Adoption Assistance Programs. For taxable years beginning in 2017, under § 137(a)(2), the amount that can be excluded from an employee’s gross income for the adoption of a child with special needs is $13,570. For taxable years beginning in 2017, under § 137(b)(1) the maximum amount that can be excluded from an employee’s gross income for the amounts paid or expenses incurred by an employer for qualified adoption expenses furnished pursuant to an adoption assistance program for other adoptions by the employee is $13,570. The amount excludable from an employee’s gross income begins to phase out under § 137(b)(2)(A) for taxpayers with modified adjusted gross income in excess of $203,540 and is completely phased out for taxpayers with modified adjusted gross income of $243,540 or more. (See section 3.03 of this revenue procedure for the adjusted items relating to the adoption credit.)