IRS Form for excluding employer-provided adoption benefits released

Posted February 11, 2015 Compliance Alert

The IRS released 2014 Form 8839 for claiming employer sponsored adoption benefits. Plan sponsors providing a qualified adoption assistance program should note:

  • Maximum adoption credit and exclusion amounts adjusted to reflect 2014 values ($13,190 per eligible child). The credit and exclusion begin to be phased out for individuals with modified adjusted gross incomes greater than $197,880 and are phased out entirely for individuals with modified adjusted gross incomes of $237,880 or more. The IRS has already announced higher, inflation-adjusted amounts for 2015 that will be reflected in the 2015 version of Form 8839 and its instructions.


  • Instructions regarding adoption of children with special needs have been revised to include an explanation that the state must make the required determination before a child can be considered a special needs child. An example to illustrate this has been added as well.


  • Adoption credit carryforward worksheet is modified to reflect there are now three years for which a taxpayer might carry forward amounts.


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