41-154: IA 177 Adoption Tax Credit 41-154 (2025)

Who files this form

Use the 2025 IA 177 to claim the Iowa Adoption Tax Credit for an eligible adopted child. The adoption must be final, and the child must be permanently placed in Iowa by an adoption service provider or an agency meeting the requirements of the Interstate Compact on the Placement of Children.

• Include only one adopted child per IA 177.
• If you and your spouse adopted the child together and file jointly, complete one IA 177. Only one credit may be claimed between you.
• If you and your spouse file separately, each spouse must complete an IA 177 and divide the credit.
• If you and another adoptive parent each paid qualified expenses to adopt the same child, each must complete an IA 177. You may divide expenses as agreed between you.

What you'll need

Have the following information ready to complete the form:

• Your name and Social Security Number (SSN).
• The child’s full name, identifying number if available, age at adoption, and year the adoption became final.
• Information about whether the child was placed in Iowa and whether the adoption is final.
• The other adoptive parent’s name and SSN, if not reported on the IA 1040. You may leave that parent’s SSN blank if you cannot obtain it.
• Adoption expenses paid or incurred, and any amounts reimbursed by an employer or another entity.
• Iowa Adoption Tax Credits already claimed for this child by you or another taxpayer.

You must also complete the IA 148 Iowa Tax Credits Schedule and include it and the IA 177 with your IA 1040 Iowa Individual Income Tax Return.

How to file

1. Complete Part I with the child’s information and the other adoptive parent’s information, if applicable.
2. Complete Part II to calculate the credit. If the adoption became final in 2025, line 9 includes adoption expenses paid or incurred before or during 2025. If it became final before 2025, include only expenses paid or incurred during 2025. If filing separate claims, include only your share.
3. Subtract reimbursements from expenses. Account for Iowa Adoption Tax Credits claimed for this child by you and other taxpayers, as directed on lines 12 through 15.
4. Enter the smaller of line 11 or line 15 on line 16.
5. Report the credit in column K of Part II on the 2025 IA 148. Enter tax credit code 66 in column I and leave column J blank. If you completed multiple IA 177 forms, report each credit separately.
6. Include the IA 177 and IA 148 with your IA 1040.

The supplied text does not provide a mailing address or e-filing directions.

Common mistakes

• Claiming before the adoption is final. You cannot claim the credit for an adoption that has not become final.
• Claiming for a child not placed in Iowa. The form directs you to stop because you are not eligible.
• Including more than one child on a form. Use a separate IA 177 for each adopted child.
• Including another parent’s share when filing separate claims. Include only your share of the expenses.
• Amending an earlier return for pre-finalization expenses. You may not amend a prior-year return to claim expenses paid or incurred before the year the adoption became final.
• Leaving out the IA 148. It must be completed and included with the IA 177 and IA 1040.

Questions people ask

How much is the credit?

The credit equals the smaller of $5,000 or qualified adoption expenses. The calculation reduces the available $5,000 by Iowa Adoption Tax Credits already claimed for the same child by you or other taxpayers.

What expenses qualify?

Qualified expenses are unreimbursed expenses paid or incurred in connection with the adoption. They include the biological mother’s medical and hospital expenses incident to the child’s birth, welfare agency fees, legal fees, and other adoption-related fees and costs.

What if my child does not have an identifying number?

Leave line 2 blank if no number is available. Otherwise, you may enter an SSN, adoption taxpayer identification number, or individual taxpayer identification number.

What happens if the credit is more than my tax liability?

The excess can be refunded or credited to your tax liability for the following year.

Official sources

• https://revenue.iowa.gov/media/4422/download?inline