If you adopted a child during the tax year, you may be eligible to deduct a portion of the adoption expenses you paid in 2014. This deduction is taken in the year you paid the expenses even if the child is not placed in your home that year. Costs relating to the child’s birth, any necessary fees, and all other costs connected with the adoption procedure are allowed. Include a list of expenses with your return. Subtract 3% of your total Iowa net income entered on line 26 from the total of qualifying adoption expense. If married, 3% of the combined net income must be subtracted. Only the amount which exceeds 3% of your total Iowa net income may be deducted.
NOTE: Taxpayer claiming adoption expenses on line 27 of the Schedule A must exclude those expenses eligible for the Adoption Tax Credit in calculating the deduction.