Adoption Credit

A tax credit for reasonable and necessary expenses of adopting a child under 18 or adopting a person who is physically and mentally unable to care for himself or herself. Qualified expenses include: adoption fees, court costs, attorney fees, traveling expenses, and other expenses directly related to the legal adoption of a child. Section 23 of the Internal Revenue Code dictates the credit amount may not exceed $10,000 (which is then adjusted for inflation). This limit is much higher if a state determines that the adopted party is a "special needs" case.