Ask AF: Defining Special Needs

The IRS has special guidelines for what categorizes a child as special needs. The AF expert explains their three requirements.

Q: Are all children from foster care considered “special needs,” and, therefore, eligible for the full adoption tax credit? I’m in the process of adopting my foster son, and I can’t get a clear answer.

A: No. For a child to be considered special needs according to the IRS tax credit guidelines, he must meet all three of the following criteria:

  • The child was a citizen or resident of the U.S. at the time the adoption process began.
  • A state has determined that the child cannot or should not be returned to his parents’ home.
  • The state has determined that the child will not be adopted unless assistance is provided to the adoptive parents. A child may be classified as special needs based on his race, age, medical history, and whether or not he’s a member of a sibling group.


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