The adoption community received good news on January 2, 2013 when Congress passed the American Taxpayer Relief Act. Upon President Obama’s signature, The American Taxpayer Relief Act will become law. The good news for the adoption community is the provision to permanently extend the adoption tax credit.
The law will permanently extend the Bush-era enhancements for non-special needs adoptions, as well as, special needs adoptions. The Bush-era enhancements allow for adoption credit and the income exclusion for employer paid or reimbursed adoption expenses up to $10,000.00. The current projected limit for 2013 is $12,770 allowing adoptive families whose income is under $150,000 to receive the full credit and the adoption credit will gradually phase out for higher incomes.
The adoption credit will allow many adoptive families who choose to provide loving and permanent homes for children the opportunity to financially secure their adoption. Those choosing to adopt undertake numerous expenses during the adoption process. The expenses, including, but not limited to, can be attorney and adoption agency fees, birth parent living expenses to insure the health and well being of the birth mom and baby, court costs, counseling costs, and medical expenses.
Adoption agencies and the adoption community as a whole echo the sentiments of Megan Lindsey of the National Council For Adoption. “Congress is to be commended for remembering children and families as a priority. The adoption tax credit is an important layer of support for families who adopt. The credit helps ensure children find their way to safe, stable, loving, and permanent families” says Megan Lindsey of National Council For Adoption. “We are grateful to Congress, the Obama administration, and our many partnering advocates in the Save the Adoption Tax Credit Working Group for their tireless efforts on behalf of this important credit.”
The American Taxpayer Relief Act reiterates the importance of a permanent home for children outlined in the United States Government Action Plan on Children in Adversity
Protective and permanent family care and positive childhood experiences have beneficial immediate and long-term effects. Investments in evidence-based interventions, such as strengthening the economic status of families, preventing violence within and outside households, rescuing children from exploitive labor situations, and removing children from institutions and placing them into protective family care, are associated with reduced mortality, improved physical growth, higher IQ scores, less grade repetition, increased school completion, decreased future criminal activity, less drug use/abuse, fewer teen pregnancies, and higher earning potential. Investments in early child care and developmental protection, with sustained support throughout adolescence and youth, can mitigate the deleterious impact of poverty, social inequality, gender biases, and disability discrimination, ultimately resulting in long-lasting gains that benefit children and youth, families, communities, and countries.
For more information and answers to adoption tax credit visit: