For families considering adoption, recent changes under the One, Big, Beautiful Bill are making the process more financially achievable. If you finalized an adoption in 2025, or even began the process before then, you may qualify for an expanded Adoption Tax Credit.

Here’s what to know:

• Higher credit amount: The maximum credit increases to $17,280 per child for 2025.
• Partially refundable for the first time: Families can now receive up to $5,000 per qualifying child back, even if they owe little or no tax. This is a major shift that helps make adoption more financially attainable.
• Broader recognition of special needs adoptions: Indian tribal governments now have the same authority as states to determine special needs status. Families adopting an eligible U.S. child with special needs may receive the full credit even without incurring qualified expenses.
• Clear eligibility rules: Children must be under 18 (or unable to self-care due to physical/mental limitations). Stepparent adoptions and surrogacy arrangements remain ineligible.
• What expenses qualify?: Reasonable and necessary fees, court and legal costs, travel (including meals and lodging), and other direct adoption related expenses, even if paid before a child is identified.

For families evaluating adoption, these updates could significantly reduce financial barriers and help more children find permanent homes.

If you’re exploring adoption, consider reviewing Form 8839 and using the IRS Interactive Tax Assistant to confirm eligibility.

If you need help with your tax return, My Accounting Now has a team of accounting specialists. Call us at 786-228-8689 or email us at info@myaccountingnow.com