Tax Credit for Adoption Expenses

There is a $5,000 tax credit for adoption related expenses. This credit may be used for domestic or international adoptions. Specifically:

Any portion of the credit that is not used up in the year expenses were incurred can be carried forward for up to five years.
Adoptive parents may claim a tax credit for up to $5,000 per child.
The credit begins to phase out when adjusted gross income (without excluding qualified adoption expenses) tops $75,000 and ends at $115,000.
The $5,000 limit is per child, not per year. The credit becomes applicable when the adoption is finalized.
Qualified adoption expenses include almost anything related to your adoption: Travel to China, agency fees, homestudy, etc. If it is is directly related to your adoption, it qualifies.
The law provides for a $6,000 credit for adoption of special needs children, but this only applies for domestic adoptions! Children adopted from China, even if they were designated as special needs, still qualify for the $5,000 credit, not $6,000.
Any portion of the credit that is not used up in the year expenses were incurred can be carried forward for up to five years.
Employer-paid adoption expenses of up to $5,000 per child do not have to be reported as income.