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previous pagePrevious Page: Instructions for Form 8839, Qualified Adoption Expenses - Definitions
next pageNext Page: Instructions for Form 8839, Qualified Adoption Expenses - Part II—Adoption Credit  Line 2
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Who Can Take the Adoption Credit or Exclude Employer-Provided Adoption Benefits?


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You may be able to take the credit or exclusion if all three of the following statements are true.
  1. Your filing status is single, head of household, qualifying widow(er), or married filing jointly. If your filing status is married filing separately, see Married Persons Filing Separate Returns below.
  2. Your modified AGI is less than $214,730 or you have a carryforward of an adoption credit from a prior year. To figure your modified AGI, see the instructions for line 8 on page 3 (for the credit) or line 26 on page 6 (for the exclusion).
  3. You report the required information about the eligible child in Part l.
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Married Persons Filing Separate Returns


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You may be able to take the credit or exclusion if all of the following apply.
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Specific Instructions


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Part I—Information About Your Eligible Child or Children 
Line 1


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Complete all columns that apply to the eligible child you adopted or tried to adopt. If you do not give correct or complete information, your credit and any exclusion may be disallowed.
If you cannot give complete information about an eligible child you tried to adopt in 2007 because the adoption was either unsuccessful or was not final by the end of 2008, complete the entries that you can on line 1. Enter See Attached Statement in the columns for which you do not have the information. Then attach a statement to your return, providing the name and address of any agency or agent (such as an attorney) that assisted in the attempted adoption. Be sure to write your name and social security number on the statement.
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Child 1 or Child 2


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If you made more than one attempt to adopt one eligible child, combine the amounts you spent and complete only the Child 1 line. Do not report the additional attempt(s) on the Child 2 line. Complete the Child 2 line only if you adopted or tried to adopt two eligible children.

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Example.

You planned to adopt one child. You had one unsuccessful attempt to adopt a child and later successfully adopted a different child. Complete only the Child 1 line because you made more than one attempt to adopt one eligible child.
caution
If you filed Form 8839 for a prior year in connection with this adoption, enter your 2008 information on the same line (Child 1 or Child 2) that you used in the prior year.
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More Than Two Eligible Children


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If you adopted or tried to adopt more than two eligible children, fill in and attach as many Forms 8839 as you need to list them. Also, enter See Attached to the right of the Caution below line 1.
For Part II, fill in lines 2 through 6 for each child. But fill in lines 7 through 18 on only one Form 8839. The amount on line 7 of that Form 8839 should be the combined total of the amounts on line 6 of all the Forms 8839.
For Part III, fill in lines 19 through 22 and 24 for each child. But fill in lines 23 and 25 through 31 on only one Form 8839. The amount on line 23 of that Form 8839 should be the combined total of the amounts on line 22 of all the Forms 8839. The amount on line 25 of that form should be the combined total of the amounts on line 24.
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Column (c)


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A child is disabled if the child is physically or mentally unable to take care of himself or herself.
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Column (d)


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A child is a child with special needs if all three of the following statements are true.
  1. The child was a citizen or resident of the United States or its possessions at the time the adoption process began.
  2. A state (including the District of Columbia) has determined that the child cannot or should not be returned to his or her parents' home.
  3. The state has determined that the child will not be adopted unless assistance is provided to the adoptive parents. Factors used by states to make this determination include:
    1. The child's ethnic background and age,
    2. Whether the child is a member of a minority or sibling group, and
    3. Whether the child has a medical condition or a physical, mental, or emotional handicap.
You may be able to claim a credit or exclusion for the adoption of a child with special needs even if you did not have any qualified adoption expenses. See line 24 and the instructions for line 5.
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If you check the box in column (d), indicating the child has special needs, be sure to keep evidence of the state's determination in your records.
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Column (e)


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A child is a foreign child if he or she was not a citizen or resident of the United States or its possessions at the time the adoption process began.
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Special rules.

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If you paid qualified adoption expenses after 1996 in connection with the adoption of a foreign child and the adoption became final in 2008, you can use the total expenses paid after 1996 in determining the amount to enter on line 5. But you cannot include more than $5,000 of expenses paid before 2002 in determining the total. If you and another person (other than your spouse if filing jointly) each paid qualified adoption expenses to adopt the same child, the total qualified expenses (including those subject to the $5,000 limit) must be divided between the two of you. You can divide it in any way you both agree.
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Exclusion of Prior Year Benefits Worksheet
(for the adoption of a foreign child that became final in 2008)

1.Did you receive employer-provided adoption benefits before 2002 for the adoption of the foreign child?  
 □ No. Skip lines 1 and 2; enter -0- on line 3 and go to line 4.   
 □ Yes. Enter the total 1997 through 2001 employer-provided adoption benefits you received for the adoption of the foreign child 1.            
2.Enter $5,000. If you and another person (other than your spouse if filing jointly) each received employer-provided adoption benefits after 1996 and before 2002 to adopt the same child, see instructions below 2.            
3.Enter the smaller of line 1 or line 2 3.            
4.Enter the total 2002 through 2008 employer-provided adoption benefits you received for the adoption of the foreign child 4.            
5.Add lines 3 and 45.            
6.Enter $11,650. If you and another person (other than your spouse if filing jointly) each received employer-provided adoption benefits in 2002 through 2008 to adopt the same child, see instructions below. 6.            
7.Enter the smaller of line 5 or line 6 here and on Form 8839, line 19. If necessary, cross out the preprinted amount on line 19 and enter the result above the preprinted amount 7.            
Next:  
 
  • Enter -0- on Form 8839, line 20.
  • Enter the amount from line 7 above on Form 8839, line 21.
  • On Form 8839, line 22, enter the total amount of employer-provided adoption benefits received in 1997 through 2008. On the dotted line next to line 22, enter "PYAB" and the total amount of benefits you received in 1997 through 2007.
  • Complete Form 8839 through line 30. Then, complete lines 8 through 13 below to figure the amount of any prior year benefits you can exclude and the taxable benefits, if any, to enter on Form 8839, line 31.
  
8.Is the amount on your 2008 Form 8839, line 30, less than the amount on Form 8839, line 23?  
 □ No. Skip lines 8 through 10 and go to line 11.   
 □ Yes. Subtract line 30 from line 23 8.            
9.Enter the total 1997 through 2007 employer-provided adoption benefits included on Form 8839, line 22, for all children 9.            
10.Taxable benefits. Subtract line 9 from line 8. If zero or less, enter -0-. Enter the result here and on Form 8839, line 31. If more than zero, also include this amount on line 7 of Form 1040 or line 8 of Form 1040NR, and enter "AB" on the dotted line 10.            
11.Enter the amount from Form 8839, line 3011.            
12.Enter the total 2008 employer-provided adoption benefits included on Form 8839, line 22, for all children 12.            
13.Prior year excluded benefits. Subtract line 12 from line 11. If zero or less, stop; you cannot exclude any of your prior year benefits 13.            
 Next. Figure the total you would enter on line 7 of Form 1040 or line 8 of Form 1040NR before you exclude the amount from line 13 above. Then, subtract the amount from line 13 above from that total. Enter the result on line 7 of Form 1040 or line 8 of Form 1040NR. On the dotted line next to the line for wages, enter "PYAB" and the amount from line 13 above.
Worksheet Instructions
Line 2. The maximum amount of employer-provided adoption benefits received after 1996 and before 2002 that can be excluded from income is $5,000 per child. If you and another person (other than your spouse if filing jointly) each received employer-provided adoption benefits to adopt the same child, the $5,000 limit must be divided between the two of you. You can divide it in any way you both agree. Enter your share of the $5,000 limit on line 2 of the worksheet above.
Line 6. The maximum amount of employer-provided adoption benefits that can be excluded from income is $11,650 per child (including up to $5,000 of benefits received after 1996 and before 2002). If you and another person (other than your spouse if filing jointly) each received employer-provided adoption benefits to adopt the same child, the $11,650 limit must be divided between the two of you. You can divide it in any way you both agree. Enter your share of the $11,650 limit on line 6 of the worksheet above.
If the adoption did not become final by the end of 2008, you cannot take the adoption credit for that child in 2008. If the adoption becomes final in a later year, you may be able to take a credit for the expenses in that year.
To find out when a foreign adoption is treated as final, see Rev. Proc. 2005-31, 2005-26 I.R.B. 1374, available at www.irs.gov/irb/2005-26_IRB/ar01.html.
If you received employer-provided adoption benefits in 2008 in connection with the adoption of a foreign child and the adoption did not become final by the end of 2008, you must include the benefits in the total entered on Form 1040, line 7, or Form 1040NR, line 8. Also, enter AB (adoption benefits) next to Form 1040, line 7, or Form 1040NR, line 8. If the adoption becomes final in a later year, you may be able to exclude the benefits from your income in that year.
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Exclusion of prior year benefits.
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If you received employer-provided adoption benefits after 1996 in connection with the adoption of a foreign child and the adoption became final in 2008, you may be able to exclude part or all of those benefits from your 2008 income. To find out if you can, complete the worksheet on page 4. You also must use the worksheet to complete Form 8839, Part III, and to figure any taxable benefits to enter on Form 8839, line 31.
If the adoption of more than one foreign child became final in 2008, complete lines 1 through 7 of the worksheet on page 4 separately for each foreign child and use the combined totals to complete lines 8 through 13 of the worksheet.
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Column (f)


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Enter the child's identifying number. This can be a social security number (SSN), an adoption taxpayer identification number (ATIN), or an individual taxpayer identification number (ITIN).
Enter the child's SSN if the child has an SSN or you will be able to get an SSN in time to file your tax return. Apply for an SSN using Form SS-5.
If you are in the process of adopting a child who is a U.S. citizen or resident alien but you cannot get an SSN for the child in time to file your return, apply for an ATIN using Form W-7A. However, if the child is not a U.S. citizen or resident alien, apply instead for an ITIN using Form W-7.
previous pagePrevious Page: Instructions for Form 8839, Qualified Adoption Expenses - Definitions
next pageNext Page: Instructions for Form 8839, Qualified Adoption Expenses - Part II—Adoption Credit  Line 2
 Use previous pagenext page to find additional occurrences of topic items.