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I am hoping someone who has experience with the adoption tax credit can answer a question for me. It is Form 8839 “Qualified Adoption Expenses”.
My wife and I are in the process of domestic infant adoption. This is a slow process and slower the past 2 years due to covid19. I consulted a tax pro last year (from MMM forums) and understood we were eligible for the credit after paying expenses and the adoption was not finalized. Here is how he explained it in his recap:
Your adoption expenses incurred in 2021 will be eligible as qualifying expenses for your 2022 tax return.
The expenses you incur in 2022 (Up to the remaining $14,400 limit) can be used as credit:
On 2022 tax return if the adoption is finalized this year.
On 2023 tax return if the adoption is not finalized this year.
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We normally use FreeTaxUSA. This is their explanation:
Do I qualify for the Adoption Credit?
You may be able to receive the Adoption Credit if you paid adoption expenses in 2021 or 2022. If the adoption is not finalized, you can use adoption expenses paid in 2021. You can take adoption expenses even if the adoption was unsuccessful. If the adoption is finalized, you can use adoption expenses paid in 2021 and 2022. If you are adopting a foreign child, you can only take the Adoption Credit after the adoption process is finalized.
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In using the software today, I am stuck on the form input as it seems to require the child's name. We have not been matched/placed yet, so we do not have a child's name to input. Does this mean that we cannot claim the credit until the placement occurs? This was not my understanding last year in working with the tax pro nor more recently reading the IRS publication.
THANK YOU for any help! This is a stressful time for our family.
My wife and I are in the process of domestic infant adoption. This is a slow process and slower the past 2 years due to covid19. I consulted a tax pro last year (from MMM forums) and understood we were eligible for the credit after paying expenses and the adoption was not finalized. Here is how he explained it in his recap:
Your adoption expenses incurred in 2021 will be eligible as qualifying expenses for your 2022 tax return.
The expenses you incur in 2022 (Up to the remaining $14,400 limit) can be used as credit:
On 2022 tax return if the adoption is finalized this year.
On 2023 tax return if the adoption is not finalized this year.
-
We normally use FreeTaxUSA. This is their explanation:
Do I qualify for the Adoption Credit?
You may be able to receive the Adoption Credit if you paid adoption expenses in 2021 or 2022. If the adoption is not finalized, you can use adoption expenses paid in 2021. You can take adoption expenses even if the adoption was unsuccessful. If the adoption is finalized, you can use adoption expenses paid in 2021 and 2022. If you are adopting a foreign child, you can only take the Adoption Credit after the adoption process is finalized.
-
In using the software today, I am stuck on the form input as it seems to require the child's name. We have not been matched/placed yet, so we do not have a child's name to input. Does this mean that we cannot claim the credit until the placement occurs? This was not my understanding last year in working with the tax pro nor more recently reading the IRS publication.
THANK YOU for any help! This is a stressful time for our family.
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