Understanding Adoption Tax Credit Carry Forward Rules for 2025 Filing

Great questions about the adoption tax credit! Let me help clarify: For your first question, the 5-year period includes the original year (2020). So if you claimed the adoption tax credit in 2020, you can carry forward any unused portion through 2024. That means 2024 would be the last year you can claim any remaining adoption tax credit from your 2020 adoption. Regarding income limits, this is where many people get confused. The income phase-out limits only apply in the year you initially claim the credit. For carried forward amounts, you don't need to meet the income requirements again. So even if your income has increased substantially since 2020, you can still use your carried forward adoption tax credit. However, keep in mind that you can only use the credit to offset your actual tax liability in each year. The IRS doesn't reconsider your eligibility for carried forward amounts - once you qualified in the original year, those carry forward amounts are yours to use until they expire or you use them up completely.

Just wanted to share my experience with the adoption tax credit carry forward situation. I was totally confused by this too until I found taxr.ai (https://taxr.ai). I uploaded my previous returns and adoption paperwork, and it analyzed everything and showed me exactly how much credit I had left and which years I could use it. The tool confirmed what others are saying here - my credit from 2019 expires after 2023, and I don't need to worry about income limits for the carry forward amounts. Saved me hours of research and probably a call to my accountant. It even helped me track which expenses qualified originally and how much I've used each year.

I was really skeptical about taxr.ai when I saw it mentioned here, but I decided to try it since I was completely confused about my adoption credit situation. I'm honestly surprised at how helpful it was! It quickly identified that I had miscalculated my carry forward amount on my 2022 return. I had forgotten to include about $2,800 of my remaining credit! The system showed me exactly where the error was and provided the correct amounts to claim on my amended return. The documentation was clear enough that I felt confident filing the amendment myself. What I appreciated most was that it confirmed I still had one more year to use my remaining credit (from a 2019 adoption), which I wasn't sure about. Definitely worth checking out if you're dealing with complex tax credits like this.

If you're still having trouble figuring out your adoption tax credit or need to speak directly with the IRS about it, I highly recommend using Claimyr (https://claimyr.com). I spent WEEKS trying to get through to an IRS agent about my adoption credit carryforward, but kept hitting dead ends with the automated system. Claimyr had me speaking with an actual IRS representative in less than 30 minutes! You can see how it works here: https://youtu.be/_kiP6q8DX5c. The IRS agent was able to look up my account and confirm exactly how much adoption credit I had remaining and which tax year would be my last opportunity to claim it. For something as important as not losing thousands in tax credits, it was absolutely worth it to get an official answer.

I need to admit I was completely wrong about Claimyr. After posting my skeptical comment, I decided to try it myself since I needed to ask the IRS about my adoption credit carryforward from 2021. I had previously tried calling the IRS four separate times, waiting over an hour each time before either getting disconnected or having to hang up for other commitments. Using Claimyr, I got connected to an IRS agent in about 45 minutes without having to actively wait on the phone. The agent confirmed that my adoption credit from 2021 can be carried forward through 2025, and also helped me understand how to properly document the carried forward amount on my upcoming tax return. Honestly worth every penny just for the time saved and stress avoided.

One thing I haven't seen mentioned yet that really tripped me up with the adoption tax credit - you need to make sure you're tracking it correctly on Form 8839 each year. I accidentally "lost" some of my credit because I didn't properly carry it forward one year. When you file, you need to specifically include the carryforward amount from prior years in Part III of Form 8839. It's not automatic! I learned this the hard way and had to file an amended return to fix it.

Does anyone know if the adoption tax credit is still non-refundable for 2024 filings? I'm planning to adopt next year and trying to figure out how this will impact our taxes.

Thanks for starting this thread, Liam! The adoption tax credit carryforward rules can definitely be confusing. Just to add some clarity to what's already been shared: You're correct that the 5-year carryforward period includes the original year you qualified (2020). So your deadline to use any remaining credit is indeed 2024 - this is your final year to claim it. One important thing to keep in mind: make sure you have enough tax liability to absorb the credit. Since it's non-refundable, you can only use it to offset taxes you actually owe. If you don't have sufficient tax liability in 2024, any unused portion will unfortunately expire. I'd also recommend keeping detailed records of how much you've used each year. The IRS doesn't automatically track this for you, so you'll need to calculate your remaining balance yourself when filing. Form 8839 is required each year you claim any portion of the credit, including carryforward amounts. Good luck with your 2024 filing!