2023 Adoption Credit
For 2023, the Adoption Credit is $15,950 (Maximum credit), $239,230 (Phase-out threshold) and $279,230 (Fully phased out).
Effective 2023-01-01Source: Rev. Proc. 2022-38 (IRS)Verified 2026-08-29
Compared with 2022
| Item | 2022 | 2023 | Change |
|---|---|---|---|
| Maximum credit | $14,890 | $15,950 | +$1,060 (+7.1%) |
| Phase-out threshold | $223,410 | $239,230 | +$15,820 (+7.1%) |
| Fully phased out | $263,410 | $279,230 | +$15,820 (+6.0%) |
Who it applies to
Taxpayers who paid qualified adoption expenses in 2023 or who adopted a child with special needs in 2023 and are claiming the Adoption Credit on their federal income tax return.
What changed this year, and why
The IRS published the 2023 inflation-adjusted amounts for the federal Adoption Credit under Internal Revenue Code § 23, as set out in Revenue Procedure 2022-38.
Common questions
- What is the maximum Adoption Credit for 2023?
- For taxable years beginning in 2023, the maximum Adoption Credit is $15,950. For an adoption of a child with special needs, the full credit of $15,950 is allowed. For other adoptions, the credit is limited to the amount of qualified adoption expenses paid, up to $15,950.
- When does the 2023 Adoption Credit begin to phase out?
- For 2023, the Adoption Credit begins to phase out when a taxpayer's modified adjusted gross income exceeds $239,230. The credit is completely phased out for taxpayers with modified adjusted gross income of $279,230 or more.
The credit shrinks as income rises
The adoption credit does not stay at its full amount for every taxpayer. Once your modified adjusted gross income exceeds $239,230, the credit begins to shrink. The reduction continues as income rises and, when modified adjusted gross income reaches $279,230 or more, the credit is eliminated entirely. Taxpayers with income at or below the $239,230 threshold can claim the full credit of up to $15,950 per eligible child, subject to other limits. The phase-out applies to both the credit and the employer-provided adoption-benefits exclusion, so higher earners may see one or both benefits reduced or lost.
2023 maximum credit. The maximum credit and the exclusion for employer-provided benefits are both $15,950 per eligible child in 2023. This amount begins to phase out if you have modified adjusted gross income in excess of $239,230 and is completely phased out for modified adjusted gross income of $279,230 or more.
2023 Instructions for Form 8839, Qualified Adoption Expenses (IRS)
The income limit is measured on modified AGI
The income threshold that determines whether the adoption credit is reduced is not ordinary adjusted gross income. It is modified adjusted gross income, or MAGI. The IRS instructs taxpayers to compare their MAGI against the phase-out range: MAGI of $239,230 or less leaves the credit untouched, MAGI between $239,231 and $279,229 reduces the credit, and MAGI of $279,230 or more eliminates it. Because the measurement is MAGI rather than regular AGI, certain adjustments that would lower AGI may not lower MAGI, so taxpayers should work through the MAGI calculation carefully before concluding they are under the threshold.
Income limit. The income limit on the adoption credit or exclusion is based on modified adjusted gross income (MAGI). For 2023, use the following table to see if the income limit will affect your credit or exclusion. IF your MAGI is... THEN the income limit... $239,230 or less won't affect your credit or exclusion. between $239,231 and $279,229 will reduce your credit or exclusion. $279,230 or more will eliminate your credit or exclusion.
2023 Instructions for Form 8839, Qualified Adoption Expenses (IRS)
The credit and the employer exclusion cannot cover the same expense
A taxpayer who pays qualified adoption expenses and also receives employer-provided adoption benefits may in general use both the adoption credit and the income exclusion. The rules allow, for example, excluding up to $15,950 of employer-paid benefits and also claiming a credit of up to $15,950 for the same adoption. However, the same dollar of expense cannot be used for both purposes. If an expense has been taken into account to figure the excludable employer benefit, that expense is not available again to compute the credit, and vice versa. The taxpayer must allocate each dollar of qualified adoption expense to either the credit or the exclusion, but not both.
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 $15,950 from your income and also be able to claim a credit of up to $15,950. But, you can't claim both a credit and exclusion for the same expenses. See Qualified Adoption Expenses and Employer-Provided Adoption Benefits, later.
2023 Instructions for Form 8839, Qualified Adoption Expenses (IRS)
Unused credit carries forward
The adoption credit is nonrefundable, so it can reduce a taxpayer's income-tax liability only to zero in the year it is claimed. When the credit figured on Form 8839, line 14, is larger than the amount that can actually be used on line 15, the difference is not forfeited. The taxpayer may have an unused credit to carry forward to the next 5 years or until used, whichever comes first. The Adoption Credit Carryforward Worksheet in the instructions is used to compute the amount available in future years. Anyone with a carryforward to 2024 must keep that worksheet because it is needed to figure the credit in the following 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. Use the Adoption Credit Carryforward Worksheet to figure the amount of your credit carryforward. If you have any unused credit to carry forward to 2024, be sure you keep the worksheet. You will need it to figure your credit for 2024.
2023 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. 2022-38 (IRS)
- Maximum credit
under § 23(b)(1) the maximum credit allowed for other adoptions is the amount of qualified adoption expenses up to $15,950
- 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 $239,230
- Fully phased out
under § 23(b)(2)(A) for taxpayers with modified adjusted gross income in excess of $239,230 and is completely phased out for taxpayers with modified adjusted gross income of $279,230 or more.