Save the Adoption Tax Credit: The Facts

You’ve probably been hearing quite a bit about the Save the Adoption Tax Credit. If you’re not sure what it’s all about, here are the facts and why you should care:

The adoption tax credit, which can be claimed for eligible adoption-related expenses, has helped thousands of American families, including Dillon families, offset the high cost of adoption since the credit was established in 1997. Since 2003, families that adopted children with special needs could claim the full credit regardless of their qualified adoption expenses. As more special needs children are being adopted, this tax credit becomes more important to families adopting these children. The credit has made adoption a more viable option for many parents who might not otherwise have been able to afford adoption, allowing them to provide children with loving, permanent families. With more than 100,000 children in U.S. foster care available for adoption, and countless millions of orphaned and abandoned children around the world, the continuation of the adoption tax credit is vital to providing love, safety, and permanency to as many children as possible.

There are now bills in both the House (HR 4373) and the Senate (S 3616) that would accomplish the goal of an adoption tax credit that is inclusive, flat for special needs adoptions, refundable and permanent. We encourage you to ask your Representative to co-sponsor HR 4373 and both your Senators to co-sponsor S 3616.

The adoption tax credit is likely to be included in a package of other tax credits, which we expect to be considered by Congress after the election in November. Having more members of Congress signed on as co-sponsors of these bills will help ensure an inclusive, flat, refundable, and permanent adoption tax credit is part of the broader tax negotiation.

The goal is have an adoption tax credit which is:

• Inclusive: Children, whether adopted from foster care, through intercountry adoption, or through private domestic adoption should be able to benefit from the adoption tax credit.

• Permanent: The adoption tax credit should become a permanent part of the tax code to ensure continued support to those who bring children into families through adoption.

• Refundable: The adoption tax credit should be refundable to ensure that families with moderate and lower incomes receive the full benefit of the credit.

• Flat for Special Needs: All families who adopt a child with special needs should be eligible for a “flat” tax credit, meaning they can claim the maximum credit without documenting expenses. This distinction, which is already in current law, recognizes the fact that many of the expenses associated with adopting children with special needs show up after an adoption is finalized.

You can make a difference by emailing your Representative and ask him or her to co-sponsor HR 4373 and both your Senators to co-sponsor S 3616. Help us save the Adoption Tax Credit!