Exclusion
In general
Gross income of an employee does not include amounts paid or expenses incurred by the employer for qualified adoption expenses in connection with the adoption of a child by an employee if such amounts are furnished pursuant to an adoption assistance program.
$10,000 exclusion for adoption of child with special needs regardless of expenses
In the case of an adoption of a child with special needs which becomes final during a taxable year, the qualified adoption expenses with respect to such adoption for such year shall be increased by an amount equal to the excess (if any) of $10,000 over the actual aggregate qualified adoption expenses with respect to such adoption during such taxable year and all prior taxable years.
Limitations
Dollar limitation
The aggregate of the amounts paid or expenses incurred which may be taken into account under subsection (a) for all taxable years with respect to the adoption of a child by the taxpayer shall not exceed $10,000.
Income limitation
Determination of adjusted gross income
Adoption assistance program
Qualified adoption expenses
For purposes of this section, the term “qualified adoption expenses” has the meaning given such term by section 23(d) (determined without regard to reimbursements under this section).
Certain rules to apply
Rules similar to the rules of subsections (e), (f), and (g) of section 23 shall apply for purposes of this section.
Adjustments for inflation
Pub. L. 104–188, title I, § 1807(b)110 Stat. 1901Pub. L. 105–34, title XVI, § 1601(h)(2)(C)111 Stat. 1092Pub. L. 105–277, div. J, title IV, § 4003(a)(2)(C)112 Stat. 2681–908Pub. L. 107–16, title II, § 202(a)(2)115 Stat. 47Pub. L. 107–147, title IV116 Stat. 45Pub. L. 108–311, title IV, § 403(e)118 Stat. 1188Pub. L. 108–357, title I, § 102(d)(1)118 Stat. 1428Pub. L. 111–148, title X, § 10909(a)(2)124 Stat. 1022Pub. L. 111–312, title I, § 101(b)(1)124 Stat. 3298Pub. L. 115–97, title I131 Stat. 2060Pub. L. 115–141, div. U, title IV, § 401(a)(40)132 Stat. 1186Pub. L. 116–260, div. EE, title I, § 104(b)(2)(E)134 Stat. 3041Pub. L. 117–2, title IX, § 9042(b)(4)135 Stat. 122(Added , , ; amended , , ; , , ; , (b)(1)(B), (2)(B), (d)(2), (e)(2), title IV, § 431(c)(1), , , 48, 68; , §§ 411(c)(2), 418(a)(2), , , 57; , , ; , , ; , (b)(2)(J), (c), , , 1023; , , ; , §§ 11002(d)(1)(N), 13305(b)(1), , , 2126; , , ; , , ; , , .)
Inflation Adjusted Items for Certain Years
section 1 of this titleFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under .
Editorial Notes
References in Text
Section 541 of title 14section 2903 of title 14Pub. L. 115–282, title I, § 117(b)132 Stat. 4230section 541 of title 14section 123(b)(1) of Pub. L. 115–282Pub. L. 115–282section 101 of Title 14, referred to in subsec. (c), was redesignated by , , , and references to deemed to refer to such redesignated section, see , set out as a References to Sections of Title 14 as Redesignated by note preceding , Coast Guard.
Prior Provisions
section 140 of this titleA prior section 137 was renumbered .
Amendments
Pub. L. 117–22021—Subsec. (b)(3)(A). inserted “85(c)” before “221”.
Pub. L. 116–2602020—Subsec. (b)(3)(A). struck out “222,” after “sections 221,”.
Pub. L. 115–1412018—Subsec. (c). substituted “section 541” for “section 514” in concluding provisions.
Pub. L. 115–97, § 13305(b)(1)2017—Subsec. (b)(3)(A). , struck out “199,” before “221”.
Pub. L. 115–97, § 11002(d)(1)(N)Subsec. (f)(2). , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.
Pub. L. 111–148, § 10909(a)(2)(B)Pub. L. 111–3122010—Subsec. (a)(2). , (c), as amended by , temporarily substituted “$13,170” for “$10,000” in heading and text. See Effective and Termination Dates of 2010 Amendment note below.
Pub. L. 111–148, § 10909(a)(2)(A)Pub. L. 111–312Subsec. (b)(1). , (c), as amended by , temporarily substituted “$13,170” for “$10,000”. See Effective and Termination Dates of 2010 Amendment note below.
Pub. L. 111–148, § 10909(b)(2)(J)(i)Pub. L. 111–312Subsec. (d). , (c), as amended by , temporarily substituted “section 36C(d)” for “section 23(d)”. See Effective and Termination Dates of 2010 Amendment note below.
Pub. L. 111–148, § 10909(b)(2)(J)(ii)Pub. L. 111–312Subsec. (e). , (c), as amended by , temporarily substituted “section 36C” for “section 23”. See Effective and Termination Dates of 2010 Amendment note below.
Pub. L. 111–148, § 10909(a)(2)(C)Pub. L. 111–312Adjustments for inflationSubsec. (f). , (c), as amended by , temporarily amended subsec. (f) generally. See Effective and Termination Dates of 2010 Amendment note below. Prior to amendment subsec. (f) read as follows: “.—In the case of a taxable year beginning after , each of the dollar amounts in subsection (a)(2) and paragraphs (1) and (2)(A) of subsection (b) shall be increased by an amount equal to—
“(1) such dollar amount, multiplied by
“(2) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2001’ for ‘calendar year 1992’ in subparagraph (B) thereof.
If any amount as increased under the preceding sentence is not a multiple of $10, such amount shall be rounded to the nearest multiple of $10.”
Pub. L. 108–311Pub. L. 107–147, § 411(c)(2)(B)2004—Subsec. (b)(1). amended directory language of . See 2002 Amendment note below.
Pub. L. 108–357Subsec. (b)(3)(A). inserted “199,” before “221”.
Pub. L. 107–147, § 411(c)(2)(A)2002—Subsec. (a). , amended heading and text of subsec. (a) generally. Prior to amendment, text read as follows: “Gross income of an employee does not include amounts paid or expenses incurred by the employer for adoption expenses in connection with the adoption of a child by an employee if such amounts are furnished pursuant to an adoption assistance program. The amount of the exclusion shall be—
“(1) in the case of an adoption of a child other than a child with special needs, the amount of the qualified adoption expenses paid or incurred by the taxpayer, and
“(2) in the case of an adoption of a child with special needs, $10,000.”
Pub. L. 107–147, § 411(c)(2)(B)Pub. L. 108–311Subsec. (b)(1). , as amended by , substituted “subsection (a)” for “subsection (a)(1)”.
Pub. L. 107–147, § 418(a)(2)Subsec. (f). , inserted at end “If any amount as increased under the preceding sentence is not a multiple of $10, such amount shall be rounded to the nearest multiple of $10.”
Pub. L. 107–16, § 202(a)(2)2001—Subsec. (a). , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “Gross income of an employee does not include amounts paid or expenses incurred by the employer for qualified adoption expenses in connection with the adoption of a child by an employee if such amounts are furnished pursuant to an adoption assistance program.”
Pub. L. 107–16, § 202(b)(1)(B)Subsec. (b)(1). , substituted “subsection (a)(1)” for “subsection (a)” and “$10,000” for “$5,000 ($6,000, in the case of a child with special needs)”.
Pub. L. 107–16, § 202(b)(2)(B)Subsec. (b)(2)(A). , substituted “$150,000” for “$75,000”.
Pub. L. 107–16, § 431(c)(1)Subsec. (b)(3)(A). , inserted “222,” after “221,”.
Pub. L. 107–16, § 202(d)(2)Subsec. (f). , (e)(2), added subsec. (f) and struck out heading and text of former subsec. (f). Text read as follows: “This section shall not apply to amounts paid or expenses incurred after .”
Pub. L. 105–2771998—Subsec. (b)(3)(A). inserted “221,” after “and sections”.
Pub. L. 105–341997—Subsec. (b)(1). substituted “of the amounts paid or expenses incurred which may be taken into account” for “amount excludable from gross income”.
Statutory Notes and Related Subsidiaries
Effective Date of 2021 Amendment
Pub. L. 117–2section 9042(c) of Pub. L. 117–2section 74 of this titleAmendment by applicable to taxable years beginning after , see , set out as a note under .
Effective Date of 2020 Amendment
Pub. L. 116–260section 104(c) of div. EE of Pub. L. 116–260section 25A of this titleAmendment by applicable to taxable years beginning after , see , set out as a note under .
Effective Date of 2017 Amendment
section 11002(d)(1)(N) of Pub. L. 115–97section 11002(e) of Pub. L. 115–97section 1 of this titleAmendment by applicable to taxable years beginning after , see , set out as a note under .
section 13305(b)(1) of Pub. L. 115–97section 13305(c) of Pub. L. 115–97section 74 of this titleAmendment by applicable to taxable years beginning after , except as provided by transition rule, see , set out as a note under .
Effective and Termination Dates of 2010 Amendment
Pub. L. 111–148section 10909(c) of Pub. L. 111–148section 1 of this titleAmendment by terminated applicable to taxable years beginning after , and section is amended to read as if such amendment had never been enacted, see , set out as a note under .
Pub. L. 111–148section 10909(d) of Pub. L. 111–148section 1 of this titleAmendment by applicable to taxable years beginning after , see , set out as a note under .
Effective Date of 2004 Amendments
Pub. L. 108–357section 102(e) of Pub. L. 108–357section 56 of this titleAmendment by applicable to taxable years beginning after , see , set out as a note under .
Pub. L. 108–311Pub. L. 107–147section 403(f) of Pub. L. 108–311section 56 of this titleAmendment by effective as if included in the provisions of the Job Creation and Worker Assistance Act of 2002, , to which such amendment relates, see , set out as a note under .
Effective Date of 2002 Amendment
section 411(c)(2) of Pub. L. 107–147section 411(c)(3) of Pub. L. 107–147section 23 of this titleAmendment by applicable to taxable years beginning after , except that amendment by section 411(c)(2)(B) applicable to taxable years beginning after , see , set out as a note under .
section 418(a)(2) of Pub. L. 107–147Pub. L. 107–16section 418(c) of Pub. L. 107–147section 21 of this titleAmendment by effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001, , to which such amendment relates, see , set out as a note under .
Effective Date of 2001 Amendment
Pub. L. 107–16section 202(g)(1) of Pub. L. 107–16section 23 of this titleAmendment by section 202(b)(1)(B), (2)(B), (d)(2), (e)(2) of applicable to taxable years beginning after , see , set out as a note under .
section 202(a)(2) of Pub. L. 107–16section 202(g)(2) of Pub. L. 107–16section 23 of this titleAmendment by applicable to taxable years beginning after , see , set out as a note under .
section 431(c)(1) of Pub. L. 107–16section 431(d) of Pub. L. 107–16section 62 of this titleAmendment by applicable to payments made in taxable years beginning after , see , set out as a note under .
Effective Date of 1998 Amendment
Pub. L. 105–277Pub. L. 105–34lPub. L. 105–277section 86 of this titleAmendment by effective as if included in the provision of the Taxpayer Relief Act of 1997, , to which such amendment relates, see section 4003() of , set out as a note under .
Effective Date of 1997 Amendment
Pub. L. 105–34Pub. L. 104–188section 1601(j) of Pub. L. 105–34section 23 of this titleAmendment by effective as if included in the provisions of the Small Business Job Protection Act of 1996, , to which it relates, see , set out as a note under .
Effective Date
section 1807(e) of Pub. L. 104–188section 23 of this titleSection applicable to taxable years beginning after , see , set out as a note under .
Transfer of Functions
section 542 of Title 6For transfer of authorities, functions, personnel, and assets of the Coast Guard, including the authorities and functions of the Secretary of Transportation relating thereto, to the Department of Homeland Security, and for treatment of related references, see sections 468(b), 551(d), 552(d), and 557 of Title 6, Domestic Security, and the Department of Homeland Security Reorganization Plan of , as modified, set out as a note under .