Per IRS Instructions for Form 8839 Qualified Adoption Expenses, page 3:
Foreign child. If the eligible child is a foreign child, you can't take the adoption credit or exclusion unless the adoption becomes final. A child is a foreign child if he or she wasn't a citizen or resident of the United States (including U.S. possessions) at the time the adoption effort began. Take the credit or exclusion as shown in the following table.
| Foreign Adoption | |
| IF you pay qualifying expenses in... | THEN take the credit... |
| any year before the year the adoption becomes final | the year the adoption becomes final. |
| the year the adoption becomes final | the year the adoption becomes final. |
| any year after the year the adoption becomes final | the year of the payment. |
| IF your employer pays for qualifying expenses under an adoption assistance program in... | THEN take the exclusion in... |
| any year before the year the adoption becomes final | the year the adoption becomes final. |
| the year the adoption becomes final | the year the adoption becomes final. |
| any year after the year the adoption becomes final | the year of the payment. |
If your employer makes adoption assistance payments in a year before the adoption of a foreign child is final, you must include the payments in your income in the year of the payment. Then, on your return for the year the adoption becomes final, you can make an adjustment to take the exclusion.
Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.