2020 Adoption Credit
For 2020, the Adoption Credit is $14,300 (Maximum credit), $214,520 (Phase-out threshold) and $254,520 (Fully phased out).
Effective 2020-01-01Source: Rev. Proc. 2019-44 (IRS)Verified 2026-08-29
Compared with 2019
| Item | 2019 | 2020 | Change |
|---|---|---|---|
| Maximum credit | $14,080 | $14,300 | +$220 (+1.6%) |
| Phase-out threshold | $211,160 | $214,520 | +$3,360 (+1.6%) |
| Fully phased out | $251,160 | $254,520 | +$3,360 (+1.3%) |
Who it applies to
Taxpayers who paid qualified adoption expenses or who adopted a child with special needs, for taxable years beginning in 2020.
What changed this year, and why
For taxable years beginning in 2020, the maximum adoption credit under IRC § 23 is $14,300 per child. The credit phases out for taxpayers with modified adjusted gross income above $214,520 and is fully phased out at $254,520 or more.
Common questions
- Can I claim the full $14,300 if I did not spend that much on an adoption?
- The maximum credit for 2020 is $14,300. If you adopt a child with special needs, you may claim the full $14,300 credit regardless of actual expenses. For other adoptions, you may claim qualified adoption expenses up to $14,300.
- What income level causes the credit to phase out?
- The credit begins to phase out when your modified adjusted income exceeds $214,520. It is fully phased out once your modified adjusted income reaches $254,520.
- Does this credit apply to tax year 2020 only?
- It applies to taxable years beginning in 2020.
The credit shrinks as income rises
The 2020 adoption credit is subject to an income phaseout based on modified adjusted gross income (MAGI). If your MAGI exceeds $214,520, the credit begins to shrink. Once your MAGI reaches $254,520 or more, the credit is completely eliminated and you cannot claim it at all. Taxpayers with MAGI at or below the $214,520 threshold are eligible for the full maximum credit of $14,300 per eligible child, subject to other limitations such as qualified expense amounts. The same phaseout range applies to both the adoption credit and the employer-provided adoption benefits exclusion, since both share the same $14,300 per-child limit and the same income-based reduction.
The maximum credit and the exclusion for employer-provided benefits are both $14,300 per eligible child in 2020. This amount begins to phase out if you have modified adjusted gross income in excess of $214,520 and is completely phased out for modified adjusted gross income of $254,520 or more.
2020 Instructions for Form 8839, Qualified Adoption Expenses (IRS)
The income limit is measured on modified AGI
The income limit on the 2020 adoption credit and employer-provided adoption benefits exclusion is based on your modified adjusted gross income (MAGI). For 2020, if your MAGI is $214,520 or less, the income limit does not affect your credit or exclusion. If your MAGI is between $214,521 and $254,519, the limit will reduce your credit or exclusion. If your MAGI is $254,520 or more, the limit will eliminate your credit or exclusion entirely.
Income limit. The income limit on the adoption credit or exclusion is based on modified adjusted gross income (MAGI). For 2020, use the following table to see if the income limit will affect your credit or exclusion. IF your MAGI is... THEN the income limit... $214,520 or less won't affect your credit or exclusion. between $214,521 and $254,519 will reduce your credit or exclusion. $254,520 or more will elimin
2020 Instructions for Form 8839, Qualified Adoption Expenses (IRS)
The credit and the employer exclusion cannot cover the same expense
While you can claim both the adoption credit and the exclusion for employer-provided adoption benefits for the expenses of adopting an eligible child, you cannot claim both a credit and an exclusion for the same expenses. Each dollar of qualified adoption expense can be used for either the credit or the exclusion, but not both. For example, depending on the cost of the adoption, you may be able to exclude up to $14,300 from your income and also claim a credit of up to $14,300, but these must come from different expenses.
You can claim both the exclusion and the credit for expenses of adopting an eligible child. For example, depending on the cost of the adoption, you may be able to exclude up to $14,300 from your income and also be able to claim a credit of up to $14,300. But, you can't claim both a credit and exclusion for the same expenses.
2020 Instructions for Form 8839, Qualified Adoption Expenses (IRS)
Unused credit carries forward
If the adoption credit you are entitled to exceeds the amount you can use in the current tax year, the unused credit carries forward. Specifically, if Form 8839, line 15, is smaller than line 14, you may have an unused credit to carry forward to the next 5 years or until used, whichever comes first. The IRS provides an Adoption Credit Carryforward Worksheet to calculate the amount you can carry forward. You should keep this worksheet if you have any unused credit to carry forward to 2021, as you will need it to figure your credit for that year.
If Form 8839, line 15, is smaller than line 14, you may have an unused credit to carry forward to the next 5 years or until used, whichever comes first.
2020 Instructions for Form 8839, Qualified Adoption Expenses (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Rev. Proc. 2019-44 (IRS)
- Maximum credit
under § 23(b)(1) the maximum credit allowed for other adoptions is the amount of qualified adoption expenses up to $14,300
- Phase-out threshold
The available adoption credit begins to phase out under § 23(b)(2)(A) for taxpayers with modified adjusted gross income in excess of $214,520
- Fully phased out
under § 23(b)(2)(A) for taxpayers with modified adjusted gross income in excess of $214,520 and is completely phased out for taxpayers with modified adjusted gross income of $254,520 or more.