What is the Adoption Tax Credit?
The adoption tax credit (ATC) provides financial benefits to families that open their homes to children through adoption from foster care, intercountry adoption, or private domestic adoption.
The ATC has helped offset the high cost of adoption for hundreds of thousands of families since it was established in 1997. Parents who adopted a child who has been determined to be special needs by the state or county child welfare agency can claim the maximum credit regardless of whether they have qualified adoption expenses at all. A special needs adoption is one that has been determined that the child is not likely to be adopted unless the government provides assistance to the adoptive family, a determination used almost exclusively for foster children. Approximately 90% of foster children are considered special needs in relation to the ATC.
How will making the adoption tax credit refundable help families?
Right now the credit disadvantages low and middle income families and may prevent them from adopting children who need a family. Adoptive families who have low or moderate incomes receive no benefit or partial benefit from the non-refundable ATC. Families with annual incomes between $30,000 and $50,000 could only claim on average $1,148 of the credit annually. Thus, most of the benefit of the adoption tax credit goes to families making $100,000 or more per year, for they have a higher tax liability.
Passing the Adoption Tax Credit Refundability Act would reinstate the refundable provision, which was in place in 2010 and 2011. This would allow all eligible families, no matter what their income level, to receive this benefit. It will encourage adoptions, particularly from foster care, and that will help ensure more children have the permanent, loving family they need.
How can you help?
Please call your two Senators and your Representative to ask them to protect the adoption tax credit and make it refundable by becoming cosponsors of the Adoption Tax Credit Refundability Act.
* Senator Mazie Hirono – Phone: (202) 224-6361
* Senator Brian Schatz – Phone: (202) 224-3934
* Click here to find your representative
• Be sure to say, “I am a constituent.”
• On the Senate side, ask them to become co-sponsors of S. 950.
• On the House side, the bill number is H.R. 2434.
• If you’re calling, ask for the staff person that handles tax issues or adoption-related issues for the office. If no one is available, leave a detailed message with contact information.
• Be direct in your request: “I want my member of Congress to support a refundable adoption tax credit.”
• Make it relevant. Share your personal adoption experience and explain why the refundable adoption tax credit is important.
• For a sample script, click here.
Do not underestimate the power of your voice and your story. Members of Congress support bills that matter to their constituents. Please share this information with your networks. Click here to follow Save the Adoption Tax Credit Advocacy Updates via Facebook.