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INSTRUCTIONS

Adoption Tax Credit: Individuals and business entities may

Part D

claim a tax credit for their total nonrecurring adoption expenses

Enter all nonrecurring adoption expenses paid by the employer if

for each special needs child adopted. The credit is limited to

the employer is claiming a portion of the available credit.

$10,000 per child, adopted by a Missouri resident. The full credit

may be claimed when the adoption is final, or a claim for 50

Part E

percent of the credit may be made when the child is placed in the

Must be completed by the agency certifying the child meets the

home and the remaining 50 percent may be claimed when the

criteria for a special needs child. If the credit is claimed upon

adoption is final.

placement of the child, this certification will be completed at that

time and does not need to be completed again when the

The credit is non-refundable and limited to the tax liability. The

adoption is final and the remainder of the credit is claimed.

credit is available for a total of five consecutive years. The five

year period begins when the credit is first taken or the adoption is

Part F

final, whichever occurs first.

Completed by the Division of Family Services certifying the

adoption expenses in Part B and/or Part D will not be reimbursed

Two Million Dollar Limitation: The total amount of all adoption

from funds available under any federal, state, or local programs.

tax credits that can be redeemed in any fiscal year is limited to

If credit is claimed upon placement of the child, this certification

two million dollars. If a claim for the credit is filed after the two

will be completed at that time and does not need to be completed

million dollar limit is met for the fiscal year, the credit will be

again when the adoption is final and the remainder of the credit is

denied. The claim may be re-filed on or after the first day of the

claimed.

next fiscal year (July 1).

Part G

Special Needs Child: A child for whom it has been determined

Complete only if the child will be 18 years of age or older when

by the Divisions of Family Services, a child-placing agency

the adoption is final. If the credit is claimed upon placement of

licensed by the state, or a court of competent jurisdiction to be a

the child, this certification will be completed at that time and does

child:

not need to be completed again when the adoption is final and

(a) that cannot or should not be returned to the home of his

the remainder of the credit is claimed.

or her parents; and

(b) who has a specific factor or condition such as ethnic

To Claim the Adoption Tax Credit: Attach Form ATC and Form

background, age, membership in a minority or sibling

MO-TC to the tax return the first year the adoption tax credit is

group, medical condition or handicap because of which

claimed. (The remaining four years the credit is claimed only

it is reasonable to conclude that such child cannot be

attach Form MO-TC.)

easily placed with adoptive parents.

If electing to file for 50 percent of the credit at the time of

placement or when adoption is finalized, attach Form ATC to

Form MO-TC and the tax return.

Line-by-Line Instructions:

Part A

When first claiming the credit as the result of a sale or assign-

Enter the information for the child.

ment, attach a statement signed by the seller including the

names, addresses, and social security numbers of the buyer and

Part B

seller, the date the credit was sold, the amount of the tax credit

Enter the nonrecurring adoption expenses incurred by the

sold, and a copy of Form ATC completed by the adoptive

adoptive parents (up to $10,000).

parents.

Part C

Indicate if an employer has provided funds toward the adoption

and is claiming a portion of the available credit.

This publication is available upon request in alternative accessible format(s).

MO 860-1870 (11-2002)

Instructions For Form Mo 860-1870 - Adoption Tax Credit Claim - Missouri Department Of Revenue

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