A federal tax credit that may be claimed by federal taxpayers who incur qualifying expenses, such as adoption fees, court costs, attorney fees and travel expenses, to adopt an eligible child. To claim the credit, the taxpayer must submit adoption documents and form 8839, Qualified Adoption Expenses, along with his or her federal tax return. Form 8839 is used to calculate the amount of the credit and also asks for the child's first and last name, birth year, whether the child has special needs, whether the child is foreign born and if the child is disabled.
In some years, the tax credit has been refundable, meaning that it could be claimed even if the credit exceeded the taxpayer's tax liability. In other years, the tax credit has been nonrefundable. If the taxpayer's employer also provides adoption assistance payments, these will reduce the amount of the credit.