Adoption Tax Credit - child is the nephew of taxpayer

[plrraz]

My research shows me that I can, in fact take the adoption credit for a family member such as a nephew, particularly in light of the fact that the child is considered to be special needs, given that it was determined he could not live with the parents and was placed in foster care.

I do know that a taxpayer cannot take the credit for the adoption of a step child, but for some reason I thought it also applied to family members. (I don't know why I thought that, I think I had read it once, but I cannot find it anywhere, lol.)

[BobKamman · Accepted solution]

I had a client who adopted a special-needs niece at birth (the mother was a crack addict) and qualified for the credit, a few years ago.  

The talking heads shouting at each other on cable TV will always remind you of how complicated the Internal Revenue Code is, but sometimes you just need high-school graduate reading skills:

(d)Definitions  For purposes of this section—

(1) Qualified adoption expenses The term “qualified adoption expenses” means reasonable and necessary adoption fees, court costs, attorney fees, and other expenses—

(A) which are directly related to, and the principal purpose of which is for, the legal adoption of an eligible child by the taxpayer,

(B) which are not incurred in violation of State or Federal law or in carrying out any surrogate parenting arrangement,

(C) which are not expenses in connection with the adoption by an individual of a child who is the child of such individual’s spouse, and

(D) which are not reimbursed under an employer program or otherwise.

(2) Eligible child  The term “eligible child” means any individual who—

(A) has not attained age 18, or

(B) is physically or mentally incapable of caring for himself.

Full text of Section 23 at https://www.law.cornell.edu/uscode/text/26/23