Tax Break for Adoption Fees

  • Description
  • Funding History
  • Proposals

The Tax Break for Adoption Fees is a deduction provided by the Commonwealth to taxpayers who have paid fees to licensed adoption agencies while attempting to adopt a minor child.

The deduction includes all fees paid by the taxpayer in the taxable year to an adoption agency on account of the adoption process of a minor child. The taxpayer's Massachusetts taxable income is thus reduced by the full amount of all applicable fees paid. The deduction is available to taxpayers regardless of whether an adoption actually takes place during the taxable year.

In addition, "No deduction is allowed for any portion of expenses that is paid or reimbursed by an employer and excluded from gross income under federal tax law (IRC Section 137)." (Massachusetts Department of Revenue "Guide to Personal Income Tax")

The Department of Revenue estimates that this tax break costs the Commonwealth about half a million dollars annually in forgone tax revenue.

Updated August 2016

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