08/25/2025
✨ Important update for adoptive families in 2025 ✨
President Trump’s “One Big Beautiful Bill” was signed into law on July 4, and it includes a major change to the Adoption Tax Credit. Here’s what you need to know:
✅ Maximum credit amount (2025): $17,280 per child
✅ Refundable portion: Up to $5,000 back, even if your tax liability is zero
✅ Indexed to inflation: The credit increases yearly to keep up with rising costs
✅ Who qualifies? Families adopting through foster care, domestic private adoption, or international adoption (with some limitations)
✅ Special needs adoptions: Automatically eligible for the full credit if determined by the state
⚠️ Income limits: The credit begins to phase out at a MAGI of $259,190 and is fully phased out at $299,190.
Covered expenses include:
• Legal & agency fees
• Court costs
• Travel, meals, and lodging tied to the adoption
• Re-adoption costs for foreign children
🚫 Not covered: Stepchild adoptions, surrogate parenting costs, or expenses reimbursed by an employer or other programs.
Adoption can feel financially overwhelming, but this expanded credit makes the journey to growing your family more accessible. 💙
📌 Whether you work with our Firm or another tax professional, it’s worth looking into how this credit can support your adoption journey.