How to generate Form 8839 Qualified Adoption Expenses in ProConnect Tax

What's new for tax year 2025:

• Up to $5,000 of the adoption credit may be refundable.
• Parity for Indian tribal governments. Tribal governments now have parity for special needs adoption determinations. This means that state governments and Indian tribal government determinations of special needs are both recognized for purposes of the adoption credit.
• Maximum credit amount has been increased to $17,280 per eligible child and the modified adjusted gross income amount has been changed.
• For more information, see the IRS instructions here.

To generate Form 8839 to receive the adoption credit:

1. Go to Input Return ⮕ Credits ⮕ Adoption Credit (8839) from the left menu.
2. Enter the adopted child's personal information in the Eligible Children section (name, Social Security number, date of birth).
3. Select any of the applicable boxes in the Eligible Children section.
   • Born before 20YY and was disabled - This selects Form 8839, Line 1, column (c)
   • Special needs adoption that became final in 20YY - This selects Form 8839, Line 1, column (c)
   • Foreign Child - This entry selects Form 8839, Line 1, column (e). For a foreign child, if the taxpayer received employer-provided adoption benefits with the adoption but the adoption wasn't final in the current year, the program includes in income all employer-provided benefits related to the child. 
   • Adoption was not final in 20YY - For a foreign child, if the taxpayer received employer-provided adoption benefits with the adoption but the adoption wasn't final in the current year, Lacerte includes in income all employer-provided benefits related to the child.
     • For a special needs child, the adoption must be final in the current year for the taxpayer to qualify for the maximum credit per child, regardless of the amount of the taxpayer's expenses or the exclusion from income of up to the maximum amount, regardless of the amount of employer-provided adoption benefits received.
   • Employer has qualified adoption assistance program - Select the box (or enter 1) if the eligible child is a special needs child and no employer-provided adoption benefits are shown in box 12 of Form W-2, but the taxpayer's employer has a qualified adoption assistance program.
     • Based on this entry, the program will exclude from the taxpayer's income up to the maximum amount for each special-needs child regardless of the amount of employer-provided adoption benefits received.
4. Enter the expenses in the appropriate fields under the Qualified Adoption Expenses Paid in subsection.
   • 20YY for adoption not finalized by end 20YY - Adoption expenses paid in the prior year are eligible for the adoption credit, even if the adoption is still not final by the end of the current year. This doesn't apply to foreign adoptions that must be final to take the credit.
     • If the adoption wasn't finalized by the end of the current year, and adoption expenses were paid in the preceding year, enter the amount paid by the taxpayer that wasn't reimbursed or paid by the employer in that preceding year.
   • Prior years for adoption of foreign child finalized in 20YY - If the adoption was finalized during the current year, enter the amount paid in the current year, and all prior years for adoption expenses with the adoption of a foreign child. Enter expenses paid by the taxpayer that weren't reimbursed or paid by the employer.
   • 20YY and 20YY for adoption finalized in 20YY - If the adoption was finalized during the one preceding year or the current year, enter the amount paid in the current year by the taxpayer that wasn't reimbursed or paid by the employer.
   • 20YY for adoption finalized before 20YY - If the adoption was finalized during the current year, enter the amount paid in the current year by the taxpayer that wasn't reimbursed or paid by the employer.
5. Under Prior Year Information, enter the following, if applicable:
   • Limited qualified adoption expenses - If taxpayer filed a prior year Form 8839 with the adoption of this child, enter the limited qualified adoption expenses from the appropriate line of the Form 8839 in the prior year(s).  Leave this field blank if the taxpayer filed a prior year Form 8839 with the adoption of another child.
   • Limited employer provided benefits - If taxpayer filed a prior year Form 8839 with the adoption of this child, enter the limited employer-provided benefits from the appropriate line of the Form 8839 in the prior year(s). Leave this field blank if the taxpayer filed a prior year Form 8839 with the adoption of another child.
   • Employer provided benefits for foreign adoption not finalized in prior year - If taxpayer filed a prior year Form 8839 with the adoption of this child, enter the employer-provided benefits received in all prior tax years for a foreign adoption, not finalized in the current tax year from the appropriate line of the Form 8839 in the prior year(s). 
     • If the taxpayer received employer-provided adoption benefits with an adoption of a foreign child and the adoption became final in the prior year, the taxpayer may be able to exclude part or all of those benefits from their prior-year income. Lacerte produces a worksheet to support this calculation.  Leave this field blank if the taxpayer filed a prior year Form 8839 with the adoption of another child.

To override the adoption credit

1. Go to Input Return ⮕ Credits ⮕ Adoption Credit (8839) from the left menu.
2. Select the General Information link at the top right of screen.
3. Enter the amount in Form 8839 [Override].
   • ProConnect Tax won't generate Form 8839 when an override is entered. You'll need to complete it manually.

How to enter an unsuccessful adoption

Attempted Adoptions of U.S. Children

Per the Attempted Adoptions of U.S. Children section of the Instructions for Form 8839:

In general, the dollar limitation requires you to combine the qualified adoption expenses you paid if you made more than one attempt to adopt one eligible U.S. child. When you combine the amounts you spent, complete only the “Child 1” line. Don't report the additional attempt(s) on the “Child 2” or “Child 3” line. Complete the “Child 2” or “Child 3” lines only if you adopted or tried to adopt two or three eligible children.

How do I enter this credit information in the program?

Inputs for all adoption-related information are on Adoption Credit (8839).

1. Go to Input Return ⮕ Credits
2. Select Adoption Credit (8839)

Expenses for an unsuccessful or failed adoption must be taken in the year following the one in which the expenses were incurred. For all unsuccessful adoptions, proof is required to be filed with the return. If paper filing, include the documentation with the return. If e-filing, send the proof of the failed adoption with the return as a PDF Attachment.