U.S. · Form 8839 line 29
Form 8839 line 29, excluded benefits.
How much employer adoption help stays tax free.
Form 8839 line 29 is excluded benefits: line 24 minus line 28. Line 28 is line 24 times the phaseout ratio on line 27, which applies only when modified AGI on line 25 is more than $259,190. Below that, the ratio is zero and line 29 equals line 24.
Work out line 29
Result
Reference table
| Line | What it is |
|---|---|
| Line 24 | Smaller of line 21 or line 22 (or line 21 for a special needs child final in 2025 with a qualified plan). |
| Line 25 | Modified AGI from the worksheet in the instructions. |
| Line 26 | If line 25 is more than $259,190, line 25 minus $259,190; otherwise skip lines 26 and 27. |
| Line 27 | Line 26 divided by $40,000, rounded to at least three places, no more than 1.000. |
| Line 28 | Line 24 times line 27. |
| Line 29 | Excluded benefits, line 24 minus line 28. |
| Line 30 | Total of the line 29 amounts. |
The phaseout
The exclusion shrinks as modified AGI rises above $259,190. Line 26 takes the excess, line 27 divides it by $40,000 and caps the ratio at 1.000, and line 28 multiplies the benefit on line 24 by that ratio. Line 29 is what is left after that reduction.
Modified AGI is not the same as line 7
Line 25 uses its own worksheet: it starts with the Form 1040 line 1z amount you would enter if you could exclude the total on Form 8839 line 23, adds the line 23 amount back, and adds certain items from Form 1040 and Schedule 1. The instructions warn that your MAGI for the adoption credit may differ from the worksheet figure, so read the line 7 instructions before using it there.
What happens next
Line 30 adds the line 29 amounts. Line 31 compares it with line 23: any benefits above the excluded amount are taxable and flow to line 1f of Form 1040. If your MAGI is high enough that the ratio reaches 1.000, nothing is excluded and the full benefit is taxable.
Worked example
Line 24 is $17,280 and modified AGI is $269,190. Line 26 is $10,000, line 27 is 0.250, line 28 is $4,320 and line 29 is $12,960. At modified AGI of $259,190 or less, line 29 would stay $17,280. Figures are illustrative.
Limits of this page
The calculator handles one child and assumes you have already worked out line 24 and line 25. With several children, line 30 sums the line 29 amounts.
Sources
- Instructions for Form 8839 (2025): Line-by-line instructions, worksheets and limits. Read November 2, 2026.
- Form 8839 (2025): The form itself, for exact line wording. Read November 2, 2026.
These are the tax year 2025 edition instructions and forms (published for returns filed in 2026). The IRS revises them each year, so thresholds, line numbers and limits can change; check the current edition before relying on a figure.
Frequently asked questions
What is line 29 on Form 8839?
Excluded benefits: line 24 minus line 28.
When does the exclusion phase out?
When modified AGI on line 25 is more than $259,190, over a $40,000 range.
What happens at high income?
Line 27 caps at 1.000 so line 28 equals line 24 and line 29 is zero.
Where do the benefits that are not excluded go?
They become taxable benefits on line 31 and line 1f of Form 1040.
Which tax year is this?
The 2025 edition of Form 8839 and its instructions.
Not tax or legal advice
This page summarizes IRS instructions and is not tax, legal or financial advice. A CPA, enrolled agent or the IRS can confirm what applies to your situation. Everything runs in your browser; nothing you enter is sent anywhere.