Instructions For Form 8839 Draft - Qualified Adoption Expenses

If you and another person (other than your spouse if

paid from her income and may claim a credit for the $10,000

filing jointly) adopted or tried to adopt an eligible

of qualified adoption expenses she paid.

child, see the instructions for line 2 on page 5

CAUTION

Example 3. Paul paid $30,000 in qualified adoption

(or line 13 on page 6, if applicable) before completing Part II

expenses to adopt an eligible foreign child, and the adoption

(or Part III).

became final in 2011. Under a qualified adoption assistance

program, Paul’s employer reimbursed him for $13,360 of

Qualified Adoption Expenses

those expenses. Paul may exclude the $13,360

Qualified adoption expenses are reasonable and necessary

reimbursement from his income. The remaining $16,640 of

expenses directly related to, and for the principal purpose of,

expenses ($30,000 – $13,360) continue to be qualified

the legal adoption of an eligible child.

adoption expenses that are eligible for the credit. However,

Paul’s credit is dollar-limited to $13,360. The remaining

Qualified adoption expenses include:

•

$3,280 ($30,000 – $13,360 – $13,360) may never be

Adoption fees,

•

claimed as a credit or excluded from gross income.

Attorney fees,

•

Court costs,

•

Who Can Take the Adoption Credit or

Travel expenses (including meals and lodging) while

away from home, and

Exclude Employer-Provided Adoption

•

Re-adoption expenses relating to the adoption of a foreign

child.

Benefits?

Qualified adoption expenses do not include expenses:

You may be able to take the credit or exclusion if all three of

•

For which you received funds under any state, local, or

the following statements are true.

federal program,

1. Your filing status is single, head of household,

•

That violate state or federal law,

qualifying widow(er), or married filing jointly. Generally, if

•

For carrying out a surrogate parenting arrangement,

you are married, you must file a joint return to take the credit

•

For the adoption of your spouse’s child,

or exclusion. However, if you are married and filing a

•

Paid or reimbursed by your employer or any other person

separate return, you may be able to take the credit or

or organization, or

exclusion on a separate return if you are considered

•

Allowed as a credit or deduction under any other provision

unmarried because you are legally separated or living apart

of federal income tax law.

from your spouse and you meet certain other requirements.

Employer-Provided Adoption Benefits

See Married Persons Filing Separate Returns below.

2. Your modified adjusted gross income (MAGI) is less

In most cases, employer-provided adoption benefits are

than $225,210. To figure your MAGI, see the instructions for

amounts your employer paid directly to either you or a third

line 7 on page 6 (for the credit) or line 19 on page 7 (for the

party for qualified adoption expenses under a qualified

exclusion).

adoption assistance program. But see Children with special

3. You report the required information about the eligible

needs on page 3. A qualified adoption assistance program is

child in Part l.

a separate written plan set up by an employer to provide

adoption assistance to its employees. For more details, see

Married Persons Filing Separate Returns

Pub. 15-B, Employer’s Tax Guide to Fringe Benefits.

You may be able to take the credit or exclusion if all of the

Employer-provided adoption benefits should be shown in

following apply.

box 12 of your Form(s) W-2 with code T. Your salary may

•

Statements (2) and (3) above under Who Can Take the

have been reduced to pay these benefits. You may also be

Adoption Credit or Exclude Employer-Provided Adoption

able to exclude amounts not shown in box 12 of your Form

Benefits are true.

W-2 if all of the following apply.

•

You lived apart from your spouse during the last 6 months

You adopted a child with special needs. See the

of 2011.

instructions for line 1, column (d), on page 5 for the

•

The eligible child lived in your home more than half of

definition of a child with special needs.

•

2011.

The adoption became final in 2011.

•

You provided over half the cost of keeping up your home.

Your employer had a qualified adoption assistance

program as described above.

When To Take the Credit or Exclusion

The following examples help illustrate how qualified

adoption expenses and employer-provided adoption benefits

When you can take the adoption credit or exclusion depends

apply to the maximum adoption credit allowed.

on whether the eligible child is a citizen or resident of the

United States (including U.S. possessions) at the time the

Example 1. Madelyn paid $10,000 in qualified adoption

adoption effort began.

expenses for the adoption of an eligible child. Under a

qualified adoption assistance program, Madelyn’s employer

Child who is a U.S. citizen or resident. If the eligible child

reimbursed her for $4,000 of those expenses. Madelyn may

is a U.S. citizen or resident, you can take the adoption credit

exclude the $4,000 reimbursement from her income.

or exclusion even if the adoption never became final. Take

However, because of the employer reimbursement, $4,000

the credit or exclusion as shown in the following tables.

of her expenses no longer meet the definition of qualified

adoption expenses. As a result, Madelyn’s maximum

IF you pay

adoption credit is limited to $6,000 ($10,000 – $4,000).

qualifying expenses in...

THEN take the credit in...

Example 2. Haylee paid $10,000 in qualified adoption

The year after the year

Any year before the year the

expenses for the adoption of an eligible child. Under a

adoption becomes final

of the payment.

qualified adoption assistance program, Haylee’s employer

paid an additional $6,000 of qualified adoption expenses on

The year the adoption becomes

The year the adoption

her behalf. Her total qualified adoption expenses are

final

becomes final.

$16,000 ($10,000 + $6,000). Because the expenses paid by

Any year after the year the adoption The year of the payment.

Haylee were different from the expenses paid by her

becomes final

employer, Haylee may exclude the $6,000 that her employer

-2-

Form 8839 (2011)

Instructions For Form 8839 Draft - Qualified Adoption Expenses - 2011 Page 2

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