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Instructions for Form 8839
taxmap/instr2/i8839-002.htm#en_us_publink23077td0e300

taxmap/instr2/i8839-002.htm#TXMP0d99ac79
Definitions(p1)

For Use in Tax Year 2013
rule
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Eligible Child(p1)

For Use in Tax Year 2013
rule
An eligible child is:
caution
If you and another person (other than your spouse if filing jointly) adopted or tried to adopt an eligible U.S. child, see Line 2 (or Line 17, if applicable), later, before completing Part II (or Part III).
taxmap/instr2/i8839-002.htm#en_us_publink23077td0e330

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Qualified Adoption Expenses(p1)

For Use in Tax Year 2013
rule
Qualified adoption expenses are reasonable and necessary expenses directly related to, and for the principal purpose of, the legal adoption of an eligible child.
Qualified adoption expenses include:
Qualified adoption expenses do not include expenses:
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Employer-Provided Adoption Benefits(p2)

For Use in Tax Year 2013
rule
In most cases, employer-provided adoption benefits are amounts your employer paid directly to either you or a third party for qualified adoption expenses under a qualified adoption assistance program. But see Child with special needs, later.
A qualified adoption assistance program is a separate written plan set up by an employer to provide adoption assistance to its employees. For more details, see Pub. 15-B, Employer's Tax Guide to Fringe Benefits.
Employer-provided adoption benefits should be shown in box 12 of your Form(s) W-2 with code T. Your salary may have been reduced to pay these benefits. You may also be able to exclude amounts not shown in box 12 of your Form W-2 if all of the following apply.
The following examples help illustrate how qualified adoption expenses and employer-provided adoption benefits apply to the maximum adoption credit allowed.

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Example 1.(p2)

Madelyn paid $10,000 in qualified adoption expenses for the adoption of an eligible child. Under a qualified adoption assistance program, Madelyn's employer reimbursed her for $4,000 of those expenses. Madelyn may exclude the $4,000 reimbursement from her income. However, because of the employer reimbursement, $4,000 of her expenses no longer meet the definition of qualified adoption expenses. As a result, Madelyn's maximum adoption credit is limited to $6,000 ($10,000 – $4,000).

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Example 2.(p2)

Haylee paid $20,000 in qualified adoption expenses for the adoption of an eligible child, including $8,000 of legal fees. Under a qualified adoption assistance program, Haylee's employer reimbursed the $8,000 of legal fees. Haylee may exclude the $8,000 employer reimbursement from her income. However, because of the employer reimbursement, $8,000 of Haylee's expenses no longer meet the definition of qualified adoption expenses. As a result, Haylee's maximum adoption credit is limited to $12,000 ($20,000 - $8,000).

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Example 3.(p2)

The facts are the same as in Example 2 except that instead of reimbursing Haylee for her legal fees, the employer directly paid the $8,000 to the law firm. The employer's payment of the legal fees produces the same result as the employer's reimbursement of the legal fees in Example 2 ($8,000 exclusion and $12,000 credit).

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Example 4.(p2)

Paul paid $30,000 in qualified adoption expenses to adopt an eligible foreign child, and the adoption became final in 2013. Under a qualified adoption assistance program, Paul's employer reimbursed him for $12,970 of those expenses. Paul may exclude the $12,970 reimbursement from his income. The remaining $17,030 of expenses ($30,000 – $12,970) continue to be qualified adoption expenses that are eligible for the credit. However, Paul's credit is dollar-limited to $12,970. The remaining $4,060 ($30,000 – $12,970 – $12,970) may never be claimed as a credit or excluded from gross income.