Chad and Jaqueline are married and have AGI of $150,000.In 2014 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

For tax year 2014, the maximum exclusion for employer-provided adoption assistance was $13,190 per child. However, the exclusion is subject to a phase-out for taxpayers with modified adjusted gross income (MAGI) between $197,880 and $237,880. Since Chad and Jaqueline's AGI is $150,000, they are eligible for the full adoption assistance exclusion of $9,500, which is the amount of adoption costs paid by their employer. Therefore, the correct answer is D) $9,500.

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