Adoption Tax Credit: What next?

Posted on March 6, 2012

In 1996, the Small Business Job Protection Act provided the first “Adoption Assistance” tax credit for families who adopted. This tax credit was implemented to help offset the expenses families may have incurred while going through the process of adoption. Since full implementation in 1997, across political party lines and administrations and with significant ongoing Congressional support, the adoption tax credit has been increased, extended and renewed.

Curiously, the credit has not been made a permanent part of the tax code, but rather frequently has changed in amounts allowable (increasing form the original $6,000 to the current $13,600), income eligibility, refundability and documentation requirements. In other words, it takes a tax professional to assure that the right adoption tax credit filing occurs, and even then, too often an IRS audit is the result.

The Dave Thomas Foundation for Adoption, with the dedicated voice of Mr. Thomas, fought for the initial adoption tax credit in order to help ensure the adoption of children waiting to be adopted from foster care.  In the past 14 years, the credit has been used by tens of thousands of families, not only those who adopt from foster care, but any family who adopts. Challenges to the tax credit have been well-documented, from accessibility to those families most in need — most frequently families adopting children with special needs from foster care — to the confusion for families resulting from the continually changing requirements.

And now, without legislation passing this year, the current tax credit is set to expire on December 31, 2012. If allowed to expire after tax year 2012, the credit will revert back to the maximum of $6,000 for adoptions of children with special needs and will eliminate the tax credit for all other adoptions.

If we consider the original intent of the tax credit as critical to supporting families who step up and provide a safe and permanent home for some of our most vulnerable and hurt children, then it is also important to contact your elected officials ( and and ask that the tax credit be made permanent, refundable and flat for families who adopt children with special needs to help with their support, regardless of the expenses occurred in the adoption process. You can reach your senators and representative from this site:

Mr. Thomas’ words still ring true — we need to make this permanent and simple for families “because it is the right thing to do.”

For more information:

Tax tips from Jackson-Hewitt

IRS tax forms for the Adoption Tax Credit

Federal Adoption Tax Credit information


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