Tax benefits for adoption include both a tax credit for qualified adoption expenses paid to adopt an eligible child and an exclusion for employer-provided adoption assistance.
The adoption credit is nonrefundable, which means it is limited to your tax liability for the year. That means it reduces your tax amount but is not sent to you itself as a refund.
If you adopt a U.S. child that a state has determined to have special needs, you are eligible for the maximum amount of credit or exclusion for the year the adoption is final, even if you did not pay qualified adoption expenses.
When you state MILITARY ADOPTION CREDIT I think you really mean the reimbursement that is offered through DFAS.
Federal law authorizes reimbursement for certain expenses associated with adoption to a maximum of $2000 per child and not to exceed $5000 per calendar year. In order to qualify for the reimbursement, service members must be serving on continuous active duty for at least 180 days and the adoption must be finalized while on active duty. In addition, the claim must be submitted while on active duty and within 1 year of the date that the adoption was finalized.
It takes approximately 4-6 weeks for a determination to be made. For claims that are approved, payment will be issued via direct deposit.
The credit is claimed on your tax return but you have to reduce the the expenses by amounts reimbursed from employer.
I hope this is helpful.