Schedule ND-1AC: Schedule ND-1AC - Adoption Credit (2024)
North Dakota · ND Tax Commissioner · Used for tax years 2024
Schedule ND-1AC calculates the North Dakota adoption credit for 2024 based on the federal adoption credit allowed for the tax year. It reports available credit, the amount used to reduce North Dakota income tax, and unused credit carried over to 2025.
Who files this form
Use Schedule ND-1AC to claim the North Dakota adoption credit for 2024 or use an unused North Dakota adoption credit carried over from a prior tax year.
The credit is based on the federal adoption credit allowed against your federal income tax for the tax year. Qualified adoption expenses and the federal adoption credit are reported on federal Form 8839.
What you'll need
- Federal Form 8839: You must attach this to your state return.
- Federal Form 1040, Schedule 3: Use the federal adoption credit shown on line 6c.
- Form ND-1: Use the tax amount on line 20.
- Any unused North Dakota adoption credit carryover from 2023: You need this amount for line 3.
- Schedule ND-1TC: Report the credit used for 2024 on line 23.
Enter your name as shown on your return and your Social Security number on Schedule ND-1AC.
How to file
Complete the 2024 Schedule ND-1AC as follows:
- Enter the federal adoption credit allowed for the year from Form 1040, Schedule 3, line 6c, on line 1.
- Multiply line 1 by 10% and enter the result on line 2.
- Enter any unused North Dakota adoption credit carryover from 2023 on line 3. Add lines 2 and 3 on line 4.
- Enter Form ND-1, line 20, on line 5. Multiply that amount by 50% on line 6.
- On line 7, enter the smaller of line 4 or line 6, but only the portion used to reduce tax on your 2024 return. Also enter this amount on Schedule ND-1TC, line 23.
- Subtract line 7 from line 4 and enter the unused credit carryover to 2025 on line 8.
Attach Schedule ND-1AC to Form ND-1. Federal Form 8839 must also be attached to your state return. The provided text does not give a mailing address or e-filing instructions.
Common mistakes
- Forgetting required attachments: Attach Schedule ND-1AC to Form ND-1 and federal Form 8839 to your state return.
- Entering too much on line 7: The instructions say to enter only the portion of the available credit used to reduce your 2024 tax. If the available credit is $1,000 but only $400 is needed to reduce tax to zero, enter $400.
Questions people ask
How much is the North Dakota adoption credit?
The credit is 10% of the federal adoption credit allowed against your federal income tax for the tax year.
Is there a limit on the credit?
Yes. The credit is limited to 50% of your North Dakota income tax liability before tax credits. Line 7 must also reflect only the amount used to reduce your 2024 tax.
Can I carry unused credit forward?
Yes. The unused portion may be carried over and used on subsequent tax years’ returns for up to three years. On the 2024 schedule, line 8 shows the unused credit being carried over to 2025.
Do I need to attach federal Form 8839?
Yes. Federal Form 8839 must be attached to your state return.