WASHINGTON, D.C. (WTAJ) – U.S. Senators Bob Casey (D-PA) and Kevin Cramer (R-ND) introduced the Adoption Tax Credit Refundability Act.
The bill, introduced to the Senate on Sept. 21, will support families wishing to adopt by easing the financial costs associated with adoption. According to the Children’s Bureau, a federal agency organized under the United States Department of Health and Human Services, adoption from a private agency can cost the prospective adoptive parents anywhere from $30,000 to $60,000 in fees for services such as a home study, court and legal fees, counseling and medical expenses, interim child care and postplacement supervision. Independent adoption can cost prospective adoptive parents $25,000 to $45,000 for similar expenses.
According to the Statewide Adoption and Permanency Network, overseen by the Pennsylvania Department of Human Services, there are more than 3,000 children in Pennsylvania waiting to be adopted. The Children’s Bureau estimates that there are over 64,000 children nationwide waiting for adoption whose parents’ rights have been terminated.
While the American Taxpayer Relief Act made the adoption tax credit permanent in Jan. 2013, it did not extend the credit’s refundability provision, which expired in 2011. Casey’s and Cramer’s proposed legislation will restore this provision.
Data from 2011 indicated that 25% of all families who took the tax credit had adjusted gross incomes under $50,000, according to a press statement released by Casey’s administration on Sept. 21. The same press release said current data shows that one-third of adopted children live in households with an annual income at or below 200% of the poverty level.
“As many adoptive families know, the financial cost of an adoption can be significant. This tax credit is an important benefit to encourage prospective families to adopt,” Cramer said. “Shifting it from nonrefundable to refundable will allow families who experience the joy of adoption to take full advantage of the credit, regardless of their tax burden.”
In 2021, the maximum adoption credit that could be claimed was up to $14,400 for each eligible child for qualified expenses such as court costs, reasonable and necessary adoption fees and adoption-related travel expenses, according to the IRS. However, this credit was non-refundable and the credit was limited to the taxpayer’s taxes due.
“The more children who are adopted by loving families, the better off our Nation is,” Casey said. “The Adoption Tax Credit has been a proven success in increasing families’ ability to offer permanent homes to adoptive children and this bill will allow more families to experience the joy of expanding their family through adoption.”
Both Senators hope that by restoring the refundable portion of this support, and making thousands of adopting families newly eligible for the full credit, more families can be convinced that they can afford to adopt.