On
Tuesday, Representative Bruce Braley (D-IA) introduced the Making
Adoption Affordable Act (H.R. 4373), a tax bill to support adoptive
families. This bill renews and expands the Adoption Tax Credit, making
it both permanent and refundable. Currently, the Adoption Tax Credit can
only be accessed to reduce taxes owed, but this bill would enable
families adopting in the tax year to access the credit as a refund if
they do not owe taxes. H.R. 4373 also permanently reinstates the credit
at the 2010 level of $13,360.
In
a press release on his website, Braley says, “The adoption tax credit
is a small investment that provides a huge return: getting more children
into loving homes and out of the costly foster care system…When a
policy puts more kids in good families and also saves taxpayers millions
of dollars in the process, renewing it should be a no-brainer.
Expanding the adoption tax credit makes even more sense and will help
even more parents and children.”
The
adoption tax credit was first established in 1996. The Affordable Care
Act (P.L. 111-148) increased its maximum value from $10,000 to $13,170
and made it refundable for 2010 and 2011. The Tax Relief, Unemployment
Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111-312)
made changes to the law by extending the credit through 2012, but as
non-refundable and with a reduced maximum to $10,000. Without H.R. 4373,
in 2013 and following, it will be limited to special needs adoptions
and only available for qualified expenses up to a $6,000 value. The tax
credit has helped increase adoptions from approximately 25,000 per year
in the 90’s to approximately 50,000 per year today. Since 1996, $4.28
billion in adoption tax credits have been claimed, with $1.2 billion
claimed in 2010.
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