§ 137 Adoption assistance programs

OLRC 119-134 · eCFR 2026-10-19 · 12 amending Acts · cited by 1 sections

Enacted 1996 · Pub. L. 104-188 Amended · 12 Acts

19961997199820012002200420102017201820202021(a) Exclusion(b) Limitations(c) Adoption assistance program(d) Qualified adoption expenses(e) Certain rules to apply(f) Adjustments for inflation
Prior provisions 1
  • A prior section 137 was renumbered section 140 of this title.
Connections Cited by 1 · Cites 4
§ 137 Adoption assistance programs

(a) Exclusion

Amended 2001, 2002
  • 2002 Pub. L. 107-147 Pub. L. 107–147, § 411(c)(2)(A), amended heading and text of subsec. (a) generally. Prior to amendment, text read as follows: “Gross income of an employee does not include amounts paid or expenses incurred by the employer for adoption expenses in connection with the adoption of a child by an employee if such amounts are furnished pursuant to an adoption assistance program. The amount of the exclusion shall be—

    “(1) in the case of an adoption of a child other than a child with special needs, the amount of the qualified adoption expenses paid or incurred by the taxpayer, and

    “(2) in the case of an adoption of a child with special needs, $10,000.”

  • 2001 Pub. L. 107-16 Pub. L. 107–16, § 202(a)(2), reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “Gross income of an employee does not include amounts paid or expenses incurred by the employer for qualified adoption expenses in connection with the adoption of a child by an employee if such amounts are furnished pursuant to an adoption assistance program.”
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    (1) In general Gross income of an employee does not include amounts paid or expenses incurred by the employer for qualified adoption expenses in connection with the adoption of a child by an employee if such amounts are furnished pursuant to an adoption assistance program.

    (2) $10,000 exclusion for adoption of child with special needs regardless of expenses In the case of an adoption of a child with special needs which becomes final during a taxable year, the qualified adoption expenses with respect to such adoption for such year shall be increased by an amount equal to the excess (if any) of $10,000 over the actual aggregate qualified adoption expenses with respect to such adoption during such taxable year and all prior taxable years.

    Amended 2010
    • 2010 Pub. L. 111-148 Pub. L. 111–148, § 10909(a)(2)(B), (c), as amended by Pub. L. 111–312, temporarily substituted “$13,170” for “$10,000” in heading and text. See Effective and Termination Dates of 2010 Amendment note below.
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      (b) Limitations

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        (1) Dollar limitation The aggregate of the amounts paid or expenses incurred which may be taken into account under subsection (a) for all taxable years with respect to the adoption of a child by the taxpayer shall not exceed $10,000.

        Amended 1997, 2001, 2002, 2004, 2010
        • 2010 Pub. L. 111-148 Pub. L. 111–148, § 10909(a)(2)(A), (c), as amended by Pub. L. 111–312, temporarily substituted “$13,170” for “$10,000”. See Effective and Termination Dates of 2010 Amendment note below.
        • 2004 Pub. L. 108-311 Pub. L. 108–311 amended directory language of Pub. L. 107–147, § 411(c)(2)(B). See 2002 Amendment note below.
        • 2002 Pub. L. 107-147 Pub. L. 107–147, § 411(c)(2)(B), as amended by Pub. L. 108–311, substituted “subsection (a)” for “subsection (a)(1)”.
        • 2001 Pub. L. 107-16 Pub. L. 107–16, § 202(b)(1)(B), substituted “subsection (a)(1)” for “subsection (a)” and “$10,000” for “$5,000 ($6,000, in the case of a child with special needs)”.
        • 1997 Pub. L. 105-34 Pub. L. 105–34 substituted “of the amounts paid or expenses incurred which may be taken into account” for “amount excludable from gross income”.
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          (2) Income limitation The amount excludable from gross income under subsection (a) for any taxable year shall be reduced (but not below zero) by an amount which bears the same ratio to the amount so excludable (determined without regard to this paragraph but with regard to paragraph (1)) as—

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            (A) the amount (if any) by which the taxpayer’s adjusted gross income exceeds $150,000, bears to

            Amended 2001
            • 2001 Pub. L. 107-16 Pub. L. 107–16, § 202(b)(2)(B), substituted “$150,000” for “$75,000”.
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              (B) $40,000.

              (3) Determination of adjusted gross income For purposes of paragraph (2), adjusted gross income shall be determined—

              (A) without regard to this section and sections 85(c) [OLRC note: So in original. Probably should be followed by a comma.] 221, 911, 931, and 933, and

              Amended 1998, 2001, 2004, 2017, 2020, 2021
              • 2021 Pub. L. 117-2 Pub. L. 117–2 inserted “85(c)” before “221”.
              • 2020 Pub. L. 116-260 Pub. L. 116–260 struck out “222,” after “sections 221,”.
              • 2017 Pub. L. 115-97 Pub. L. 115–97, § 13305(b)(1), struck out “199,” before “221”.
              • 2004 Pub. L. 108-357 Pub. L. 108–357 inserted “199,” before “221”.
              • 2001 Pub. L. 107-16 Pub. L. 107–16, § 431(c)(1), inserted “222,” after “221,”.
              • 1998 Pub. L. 105-277 Pub. L. 105–277 inserted “221,” after “and sections”.

              (B) after the application of sections 86, 135, 219, and 469.

              (c) Adoption assistance program For purposes of this section, an adoption assistance program is a separate written plan of an employer for the exclusive benefit of such employer’s employees—

              “a separate written plan of an employer” Opening words
              “for the exclusive benefit of such employer’s employees” Opening words
              Textual readingALL OF= employer plan meets adoption assistance program definition

              (1) under which the employer provides such employees with adoption assistance, and

              (2) which meets requirements similar to the requirements of paragraphs (2), (3), (5), and (6) of section 127(b).

              An adoption reimbursement program operated under section 1052 of title 10, United States Code (relating to armed forces) or section 541 [OLRC note: See References in Text note below.] of title 14, United States Code (relating to members of the Coast Guard) shall be treated as an adoption assistance program for purposes of this section.

              Amended 2018
              • 2018 Pub. L. 115-141 Pub. L. 115–141 substituted “section 541” for “section 514” in concluding provisions.

              (d) Qualified adoption expenses For purposes of this section, the term “qualified adoption expenses” has the meaning given such term by section 23(d) (determined without regard to reimbursements under this section).

              Amended 2010
              • 2010 Pub. L. 111-148 Pub. L. 111–148, § 10909(b)(2)(J)(i), (c), as amended by Pub. L. 111–312, temporarily substituted “section 36C(d)” for “section 23(d)”. See Effective and Termination Dates of 2010 Amendment note below.
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                (e) Certain rules to apply Rules similar to the rules of subsections (e), (f), and (g) of section 23 shall apply for purposes of this section.

                Amended 2010
                • 2010 Pub. L. 111-148 Pub. L. 111–148, § 10909(b)(2)(J)(ii), (c), as amended by Pub. L. 111–312, temporarily substituted “section 36C” for “section 23”. See Effective and Termination Dates of 2010 Amendment note below.

                (f) Adjustments for inflation In the case of a taxable year beginning after December 31, 2002, each of the dollar amounts in subsection (a)(2) and paragraphs (1) and (2)(A) of subsection (b) shall be increased by an amount equal to—

                Amended 2001, 2002, 2010
                • 2010 Pub. L. 111-148 Pub. L. 111–148, § 10909(a)(2)(C), (c), as amended by Pub. L. 111–312, temporarily amended subsec. (f) generally. See Effective and Termination Dates of 2010 Amendment note below. Prior to amendment subsec. (f) read as follows: “Adjustments for inflation.—In the case of a taxable year beginning after December 31, 2002, each of the dollar amounts in subsection (a)(2) and paragraphs (1) and (2)(A) of subsection (b) shall be increased by an amount equal to—

                  “(1) such dollar amount, multiplied by

                  “(2) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2001’ for ‘calendar year 1992’ in subparagraph (B) thereof.

                  If any amount as increased under the preceding sentence is not a multiple of $10, such amount shall be rounded to the nearest multiple of $10.”

                • 2002 Pub. L. 107-147 Pub. L. 107–147, § 418(a)(2), inserted at end “If any amount as increased under the preceding sentence is not a multiple of $10, such amount shall be rounded to the nearest multiple of $10.”
                • 2001 Pub. L. 107-16 Pub. L. 107–16, § 202(d)(2), (e)(2), added subsec. (f) and struck out heading and text of former subsec. (f). Text read as follows: “This section shall not apply to amounts paid or expenses incurred after December 31, 2001.”

                (1) such dollar amount, multiplied by

                (2) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting “calendar year 2001” for “calendar year 2016” in subparagraph (A)(ii) thereof.

                Amended 2017
                • 2017 Pub. L. 115-97 Pub. L. 115–97, § 11002(d)(1)(N), substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.

                If any amount as increased under the preceding sentence is not a multiple of $10, such amount shall be rounded to the nearest multiple of $10.