A bipartisan group of lawmakers is pushing to make the adoption tax credit refundable, which could allow more families to get the credit even if it is more than their “tax burden.”
The “Adoption Tax Credit Refundability Act” was introduced by Republicans and Democrats on the House and Senate sides, and similar legislation has been introduced in prior years.
Current tax law allows “qualified expenses” for adoption to be claimed on a family’s taxes up to $16,810. However, a family cannot get any of that money back if they are paying more than that amount in federal taxes.
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It was only refundable in 2010 and 2011, according to Families Rising. If passed into law, families would be eligible for 2025.
“Adoption creates the opportunity to make families whole, but the costs can put it out of reach for too many Arizonans,” Sen. Mark Kelly, D-Ariz., said in a statement. “Making this tax credit refundable means more families can afford to adopt and give a child a safe, loving home.”
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“Adoption is a true joy for families, but it is not without significant financial cost,” Sen. Kevin Cramer, R-N.D., stated.
“Our bill will make the credit refundable to help all adoptive families access the full amount of the adoption tax credit, regardless of their tax burden. Support for adoptive families is essential to ensure more children find the stable, loving home they deserve,” the lawmaker continued.
In 2024, the credit was available for families making $252,150, but those making up to $292,150 received a smaller credit, according to the Internal Revenue Service.
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The IRS said that adoption expenses include fees for the adoption itself, legal costs, and travel costs, for example. However, people who have adopted their spouse’s child or used a surrogate do not qualify, according to the agency. The credit also works for adoptive children who originated outside the United States.
The federal tax filing deadline was on Tuesday, and conversations continue to swirl on Capitol Hill about the push to make the Tax Cuts and Jobs Act of 2017 permanent, as changes are being debated.
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