Adoption Credit

[mactaxes]

Can a taxpayer claim the Adoption Credit if they were reimbursed by their employer for the full amount of their adoption expense, BUT the employer includes the full amount of the reimbursement in the employee’s gross income? The full reimbursement amount is included in Boxes 1, 3, & 5 of the W-2 and is not shown in Box 12, Code T as an Employer-Provided Adoption Benefit.
And then what about the Exclusion of Employer-Provided Adoption Benefits?
If they can’t claim the Adoption Credit, shouldn’t they be able to exclude $14,300 of the reimbursement from tax? But Form 8839 does not appear to allow for any exclusion without a Code T on their W-2...
Have searched high and low and cannot find any guidance on this, so any help will be greatly appreciated!

[TaxGuyBill]

Yes, they should be able to claim the credit. If we assume the employer did it correctly, the taxpayer essentially just received a Bonus, not Qualified Adoption Assistance.

[mactaxes]

Thanks for the reply, TaxGuyBill. We were leaning toward the bonus conclusion also, but the adoption expense reimbursement form that the employee must fill out to receive reimbursements requires them to certify that “these expenses have not been previously claimed by me for purposes of receiving a tax credit” and so we were a little thrown off by that statement.