For 2007, a tax credit of up to $11,390 per child can come in handy for parents facing the daunting costs of adoption (up from $10,960 in 2006). Experts estimate the entire process can set parents back as much as $25,000. Here are the details of this tax break:

 Qualifying expenses. The credit can be used for each child you adopt, in the United States or abroad. To be eligible, the IRS requires the expenses to be "reasonable and necessary" for adoptions of children under age 18. They include court costs, attorney fees and travel expenses.

 Some expenses are not eligible. The IRS specifically excludes some outlays, such as those paid for a surrogate parenting arrangement and the costs incurred to adopt your spouse's child. And if you're remarried, you can't claim the credit for adopting the child of your new spouse.

 The value of a credit. If you qualify, the adoption credit can reduce your tax liability on a dollar-for-dollar basis. This is much more valuable than a deduction, which only reduces the amount of income subject to tax. For 2007, the credit is phased out for joint filers with an adjusted gross income of between $170,820 and $210,820 (up from $164,410 and $204,410 respectively in 2006).

 Double bonus. If you're fortunate enough to have an employer who pays for adoption expenses, some or all of money could be tax-free. You can get the benefits of both the tax credit and the income exclusion for the same child as long as they're not claimed for the same expenses.