2016 Adoption Tax Credit

On  November 2, 2015 the IRS issued Rev. Proc. 2015-53 which establishes the maximum amount of the Adoption Tax Credit under Section 23(a)(3) of the Internal Revenue Code for adoptions finalized in calendar year 2016 at $13,460 per child (an increase of only $60 from the maximum in 2015).  In 2016 the adoption tax credit begins to phase out at a modified adjusted gross income of $201,920 and is completely phased out for taxpayers with modified adjusted gross income of $241,920 or more.

The maximum credit for a child with special needs is also $13,460 for calendar year 2016.  The maximum amount excludable from gross income is the same, as are the phase out limits related to qualified adoption assistance programs under Section 137 (a)(2).

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