How much may an employer exclude from an employee's taxable income for qualified adoption expenses?

Author: Alice Gilman

An employer may exclude $13,190 (in 2014) in qualified expenses from an employee's income for each effort to adopt a child. Employer-provided adoption assistance is excluded from federal income tax withholding only; FICA and FUTA still apply.

However, the maximum amount that an employer may exclude from an employee's income begins to be phased out for employees with modified adjusted gross incomes that exceed $194,580. The benefit is completely phased out for employees with modified adjusted gross incomes that exceed $234,580.