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About Tax Map
IRS Tax Map 2008
Current IRS Tax Map

taxmap/instr2/i8839-003.htm#TXMP32a3abf0

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When To Take the Credit or Exclusion


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When you can take the adoption credit or exclusion depends on whether the eligible child is a citizen or resident of the United States (including U.S. possessions) at the time the adoption effort begins.
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Child who is a U.S. citizen or resident.

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If the eligible child is a U.S. citizen or resident, you can take the adoption credit or exclusion even if the adoption never became final. Take the credit or exclusion as shown in the following tables.
IF you pay
qualifying expenses in...
 THEN take the credit in...
Any year before the year the adoption becomes final The year after the year
 of the payment.
The year the adoption becomes final The year the adoption
 becomes final.
Any year after the year the adoption becomes final The year of the payment.
IF your employer pays for qualifying expenses under an adoption assistance program in... THEN take the
 exclusion in....
Any year The year of the payment.
taxmap/instr2/i8839-003.htm#TXMP69e74d6a

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Children with special needs.
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If you adopt a child with special needs you can claim $12,150 (minus any qualified adoption expenses claimed for the same child in a prior year) in the year the adoption becomes final even if you did not have any qualified adoption expenses. See the instructions for line 1, column (d), on page 3 for more information.
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Foreign child.

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If the eligible child is not a U.S. citizen or resident, you cannot take the adoption credit or exclusion unless the adoption becomes final. Take the credit or exclusion as shown on the following tables.
IF you pay
qualifying expenses in...
 THEN take the credit in...
Any year before the year the adoption becomes final The year the adoption
 becomes final.
The year the adoption becomes final The year the adoption
 becomes final.
Any year after the year the adoption becomes final The year of the payment.
IF your employer pays for qualifying expenses under an adoption assistance program in... THEN take the
 exclusion in....
Any year before the year the adoption becomes final The year the adoption
 becomes final.
The year the adoption becomes final The year the adoption
 becomes final.
Any year after the year the adoption becomes final The year of the payment.
If your employer makes adoption assistance payments in a year before the adoption of a foreign child is final, you must include the payments in your income in the year of the payment. Then, on your return for the year the adoption becomes final, you can make an adjustment to take the exclusion.
caution
Your employer is not required to withhold income tax on payments for qualifying expenses under an adoption assistance program. If you must include the payments in income in the year paid because your adoption of a foreign child is not final, your withholding may not be enough to cover the tax on those payments. You may need to give your employer a new Form W-4 to adjust your withholding, or make estimated tax payments, to avoid a penalty for underpayment of estimated tax.
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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 2008 because the adoption was either unsuccessful or was not final by the end of 2009, 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 2009 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.
caution
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 in 2009 or any prior year in connection with the adoption of a foreign child and the adoption became final in 2009, you can use the total expenses you paid in 2009 and all prior years in determining the amount to enter on line 5. 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 must be divided between the two of you. You can divide it in any way you both agree.
taxmap/instr2/i8839-003.htm#w23077t01
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Exclusion of Prior Year Benefits Worksheet
(for the adoption of a foreign child that became final in 2009)

1. Enter the total employer-provided adoption benefits you received in 2009 and all prior years for the adoption of the foreign child 1.             
2. Enter $12,150. If you and another person (other than your spouse if filing jointly) each received employer-provided adoption benefits in 2009 or any prior year to adopt the same child, see instructions below. 2.             
3. Enter the smaller of line 1 or line 2 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 3.             
Next:   
 
  • Enter -0- on Form 8839, line 20.
  • Enter the amount from line 3 above on Form 8839, line 21.
  • On Form 8839, line 22, enter the total amount of employer-provided adoption benefits received in 2009 and all prior years. On the dotted line next to line 22, enter "PYAB" and the total amount of benefits you received before 2009.
  • Complete Form 8839 through line 30. Then, complete lines 4 through 9 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.
  
4. Is the amount on your 2009 Form 8839, line 30, less than the amount on Form 8839, line 23?  
  □ No. Skip lines 4 through 6 and go to line 7.  
  □ Yes. Subtract Form 8839, line 30 from line 23 4.             
5. Enter the total employer-provided adoption benefits you received before 2009 included on Form 8839, line 22, for all children 5.             
6. Taxable benefits. Subtract line 5 from line 4. 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 6.             
7. Enter the amount from Form 8839, line 30 7.             
8. Enter the total 2009 employer-provided adoption benefits included on Form 8839, line 22, for all children 8.             
9. Prior year excluded benefits. Subtract line 8 from line 7. If zero or less, stop; you cannot exclude any of your prior year benefits 9.             
  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 9 above. Then, subtract the amount from line 9 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 9 above.
Worksheet Instructions
Line 2. The maximum amount of employer-provided adoption benefits that can be excluded from income is $12,150 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 $12,150 limit must be divided between the two of you. You can divide it in any way you both agree. Enter your share of the $12,150 limit on line 2 of the worksheet above.
If the adoption did not become final by the end of 2009, you cannot take the adoption credit for that child in 2009. 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/ar14.html.
caution
The Hague Convention on Protection of Children and Co-operation in Respect of Intercountry Adoption (Hague Adoption Convention) entered into force for the United States on April 1, 2008. The Hague Adoption Convention applies if you adopted a child from a country that is party to the Hague Adoption Convention and you filed your application and petition (Forms I-800A and I-800) with the U.S. Citizenship and Immigration Service after March 31, 2008. See www.adoption.state.gov for more information on the Hague Adoption Convention, the application and petition, and a complete list of countries that are parties to the Convention. Separate guidance will be issued providing procedures for determining when a Convention adoption will be treated as final.
If you received employer-provided adoption benefits in 2009 in connection with the adoption of a foreign child and the adoption did not become final by the end of 2009, you must include the benefits in the total entered on Form 1040, line 7, or Form 1040NR, line 8. Also, enter AB (adoption benefits) on the dotted line 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 before 2009 in connection with the adoption of a foreign child and the adoption became final in 2009, you may be able to exclude part or all of those benefits from your 2009 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 2009, complete lines 1 through 3 of the worksheet on page 4 separately for each foreign child and use the combined totals to complete lines 4 through 9 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.