Chad and Jaqueline are married and have AGI of $150,000.In 2015 they adopted a child,while taking advantage of their employer's written adoption assistance program.The adoption cost $9,500,all of which was paid by the employer in accordance with the adoption plan.How much of the employer paid adoption costs may be excluded from their income?

Question

Quizplus · Accepted Answer

According to the IRS, in 2015, the maximum amount of employer-paid adoption expenses that can be excluded from income is $13,400 per child. However, this exclusion is phased out for taxpayers with modified adjusted gross income (MAGI) between $201,010 and $241,010. Since Chad and Jaqueline's MAGI is below this threshold, they are eligible to exclude the full amount of the employer-paid adoption expenses, which in this case is $9,500. Therefore, the best choice is D, as all $9,500 of the employer-paid adoption costs may be excluded from their income.

Chad and Jaqueline Are Married and Have AGI of $150,000