The Adoption Tax Credit (made permanent in the Tax Code in 2013) is a tremendous help to families that adopt children. While the Tax Credit is not refundable, it does offer some relief to many families that adopt children.
Unfortunately, the Republicans in the House of Representatives are attempting to push forward a Tax Reform Blueprint, called "A Better Way", which calls for dramatic cuts to tax rates. It pays for these rate cuts, in part, by eliminating some credits and deductions. Among those set to go? The adoption tax credit.
The proposal is currently working its way through Congress and looks to eliminate tax incentives that affect individuals and families during certain "phases" of their lives, such as the Adoption Tax Credit. They claim that rather than incentivize things such as adoption, families would be better served by lowering their taxes in general and allowing families to use the saved money to adopt.
Adoption a child can be extremely expensive, most times running into the tens of thousands of dollars. The Adoption Tax Credit was designed to assist in offsetting some of those costs for families.
"In 2014, about 74,000 families claimed the credit, costing the government about $355 million, according to Internal Revenue Service data.
For context, the mortgage-interest deduction, which the Republican tax-reform plan would preserve, will cost the federal government about $69 billion this year — about 200 times as much."
Unfortunately, by eliminating this Tax Credit, many families can become so financially burdened through the process that it could effective deter them from pursuing adoption, leaving many needy children without homes.
We urge everyone to advocate on behalf of the Adoption Tax Credit by contacting your representatives. You can find more information on how you can assist in advocating by visiting: https://adoptiontaxcredit.org/advocate