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IRS.gov Website
Instructions for Form 8839
taxmap/instr2/i8839-001.htm#TXMP2bca8a89

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What's New(p1)

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Future developments.(p1)
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The IRS has created a page for information about Form 8839 and its instructions at www.irs.gov/form8839. Information about any future developments affecting Form 8839 (such as legislation enacted after we release it) will be posted on that page.
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Increased credit.(p1)
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The maximum credit and the exclusion for employer-provided benefits have each increased to $13,360 per eligible child. This amount begins to phase out if you have modified adjusted gross income in excess of $185,210 and is completely phased out for modified adjusted gross income of $225,210 or more.
caution
The ability to carryforward an unused adoption credit expired in 2010 when the credit was made refundable. If you have a credit carryforward from a year prior to 2010, you must file an amended 2010 income tax return and attach a 2010 Form 8839 in order to claim the credit.
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General Instructions(p1)

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Purpose of Form(p1)

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Use Form 8839 to figure your adoption credit and any employer-provided adoption benefits you can exclude from your income. You can claim both the exclusion and the credit for expenses of adopting an eligible child. For example, depending on the cost of the adoption, you may be able to exclude up to $13,360 from your income and also be able to claim a credit of up to $13,360. But, you cannot claim both a credit and exclusion for the same expenses. See Qualified Adoption Expenses and Employer-Provided Adoption Benefits, later.
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Adoption credit.(p1)
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Use Form 8839, Part II, to figure the adoption credit you can take on Form 1040, line 71, checkbox b or Form 1040NR, line 67, checkbox b. You may be able to take this credit in 2011 if any of the following statements are true.
  1. You paid qualified adoption expenses in connection with the adoption of an eligible U.S. child in:
    1. 2010 and the adoption was not final at the end of 2010, or
    2. 2011 and the adoption became final in or before 2011.
  2. You adopted a child with special needs and the adoption became final in 2011. (In this case, you may be able to take the credit even if you did not pay any qualified adoption expenses.)
  3. You paid qualified adoption expenses in connection with the adoption of an eligible foreign child in:
    1. 2011 or prior years and the adoption became final in 2011, or
    2. 2011 and the adoption became final before 2011.
      See the instructions for line 1, column (e), later.
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Income exclusion for employer-provided adoption benefits.(p1)
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Use Form 8839, Part III, to figure the employer-provided adoption benefits you can exclude from your income on Form 1040, line 7, or Form 1040NR, line 8. You may be able to exclude these benefits from income if your employer had a qualified adoption assistance program (see Employer-Provided Adoption Benefits, later) and any of the following statements are true.
  1. You received employer-provided adoption benefits in 2011. However, special rules apply for benefits received in connection with the adoption of an eligible foreign child. See the instructions for line 1, column (e), later.
  2. You adopted a child with special needs and the adoption became final in 2011.
  3. You received employer-provided adoption benefits in connection with the adoption of an eligible foreign child in:
    1. 2011 or prior years and the adoption became final in 2011, or
    2. 2011 and the adoption became final before 2011.
      See the instructions for line 1, column (e), later.
For purposes of calculating the adoption credit in Part II, qualified adoption expenses (defined later) do not include expenses reimbursed by an employer under a qualified adoption assistance program (see Employer Provided Adoption Benefits, later). For this reason, you must complete Form 8839, Part III, before you can figure the credit, if any, in Part II.
caution
You cannot exclude employer-provided adoption benefits if your employer is an S corporation in which you own more than 2% of the stock or stock with more than 2% of the voting power.
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Income limit.(p1)
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The income limit on the adoption credit or exclusion is based on modified adjusted gross income (MAGI). For 2011, use the following table to see if the income limit will affect your credit or exclusion.
IF your MAGI is...THEN the income limit...
$185,210 or lesswill not affect your credit or exclusion.
Between $185,211 and $225,209will reduce your credit or exclusion.
$225,210 or morewill eliminate your credit or exclusion.
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Note on welfare benefits and the adoption credit.(p1)
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Any refund you receive as a result of taking the adoption credit cannot be counted as income when determining if you or anyone else is eligible for benefits or assistance, or how much you or anyone else can receive, under any federal program or any state or local program financed in whole or in part with federal funds. These programs include Temporary Assistance for Needy Families (TANF), Medicaid, Supplemental Security Income (SSI), and Supplemental Nutrition Assistance Program (food stamps). In addition, when determining eligibility, the refund cannot be counted as a resource for at least 12 months after you receive it. Check with your local benefit coordinator to find out if your refund will affect your benefits.