If you adopted an eligible child in 2012, you may be able to claim the adoption credit on your federal tax return. Taxpayers who will be claiming the adoption credit and filing Form 8839, Qualified Adoption Expenses, with their 2012 Form 1040 will be able to file in late February or into March. A specific date will be announced in the near future.
The adoption tax credit offsets qualified adoption expenses, making adoption possible for some families who could not otherwise afford it.
Qualified adoption expenses are reasonable and necessary expenses directly related to the legal adoption of the child and may include adoption fees, court costs, attorney fees and travel expenses.
The adoption credit for tax year 2012 can be as much as $12,650 per eligible child. If you adopt a U.S. child whom a state, county, or the District of Columbia has determined has special needs, you may be entitled to the full credit regardless of whether you paid any actual qualified adoption expenses.
If you are eligible to claim the adoption credit, here are a few tips to remember when filling out your tax return:

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While you don’t need to include documentation with your tax return, you should keep it for your records. Documents you should keep include a final adoption decree, placement agreement from an authorized agency, court documents or the state’s determination for special needs children.

The credit for qualified adoption expenses is subject to income limitations and may be reduced or eliminated depending on your income.

This credit is nonrefundable, which means it reduces your tax and is limited to the amount of tax you owe. Any credit that exceeds what you owe may be carried forward for the next five years or until the amount is used.
To claim the credit, you must complete Form 8839, Qualified Adoption Expenses and mail it with your tax return to the IRS.

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