How do I claim a tax credit in California for the costs of adopting a child?

California no longer offers a specific tax credit for adoption costs, as the relevant law was repealed. You should instead focus on claiming the significant federal adoption tax credit and determine if you qualify for other California credits for parents. Here is how to address tax credits after an adoption: Step 1: Claim the Federal Adoption Tax Credit The primary tax benefit available is the federal Adoption Tax Credit. You must file a federal income tax return to claim it. Use IRS Form 8839, "Qualified Adoption Expenses," and attach it to your Form 1040. This credit covers qualified expenses like adoption fees, court costs, attorney fees, and travel expenses. Step 2: Gather All Necessary Adoption Documentation Collect all documents related to the adoption. You will need the final, signed Adoption Decree or Order from the court. You will also need the child's Social Security Number (SSN) or an Adoption Taxpayer Identification Number (ATIN) if the SSN is not yet available. Keep detailed receipts for all adoption-related expenses you paid. Step 3: Determine Eligibility for Other California Child-Related Credits While there is no adoption-specific credit, your new child may make you eligible for other California tax credits. Review the requirements for the Young Child Tax Credit (for a qualifying child under age six) and the Child and Dependent Care Expenses Credit (for costs paid for care so you can work). You can find the requirements on the California Franchise Tax Board (FTB) website. Step 4: File Your State and Federal Tax Returns Complete your federal tax return, attaching Form 8839 to claim the federal credit. When filing your California state tax return (Form 540), claim any other credits you qualify for, such as the Young Child or Child and Dependent Care credits. The filing deadline is typically April 15 each year. Important details and nuances: The federal adoption credit is nonrefundable, meaning it can reduce your tax liability to zero, but you will not get any of it back as a refund beyond that. However, any unused credit can be carried forward for up to five years. Warnings and limitations: The California Young Child Tax Credit and Child and Dependent Care Expenses Credit have specific income limitations and eligibility rules. You must meet these separate requirements to claim them; the adoption itself does not automatically grant these credits. This is general information and does not constitute legal advice. For complex situations, consult with a qualified California attorney or a tax professional.