The Federal Adoption Tax credit is a tax credit available to adoptive families that offset the cost of adoption. Most families will qualify for a federal tax credit simply because they adopted a child. Almost all costs related to an adoption, successful or not, qualify and include infant, foster care and even step-parent adoption. All adoptive families should consider whether they qualify.
The IRS has released Revenue Procedure 2025-32, announcing the 2026 adjustments for the Federal Adoption Tax Credit. For adoptions finalized in 2026, families may claim a maximum credit of $17,670 per child, an increase from $17,280 in 2025. The credit begins to phase out when a family’s Modified Adjusted Gross Income (MAGI) exceeds $265,180 and is fully phased out at $305,080.
The refundable portion of the credit, which allows families to receive part of the credit even if they owe no tax, has been increased to $5,120 for 2026, up from $5,000 in 2025. This tax credit is an amazing resource for adoptive families, helping ease some of the financial burden that can come with the adoption process and making it a little easier for more children to find loving, permanent homes. Consult with your tax advisor to see what your options are.