On Thursday, May 25, 2023, Representative Danny K. Davis (D-IL) joined with Representative Blake Moore (R-UT) to introduce the bipartisan H.R. 3662, Adoption Tax Credit Refundability Act of 2023. The legislation would make the current Adoption Tax Credit fully refundable, removing income as a barrier to adoption. Representative Gwen Moore (D-WI), Representative Randy Feenstra (R-IA), Representative Don Bacon (R-NE), and Representative Sydney Kamlager-Dove (D-CA) are also original cosponsors of the bill.
The Adoption Tax Credit helps families offset some of the costs of adoption, especially for children with special needs. In 2023, the existing credit offsets qualified adoption expenses up to $15,950 per adopted child. Qualified expenses can include court fees, attorney fees, agency fees, travel costs, or other expenses necessary. Currently, the tax credit disadvantages low- and middle-income families; because the credit is not refundable, families earning less than $30,000 do not earn enough to receive a tax benefit, and families earning $30,000-$50,000 may receive a partial credit that only covers some of their expenses. Given that approximately half of youth adopted from foster care live in families with incomes at or below 200 percent of the federal poverty level, the reality of a non-refundable credit creates financial barriers to permanency.
“The Adoption Tax Credit Refundability Act reflects common-sense federal policy,” said Representative Davis in the press release. “It strengthens families, removes income as a barrier to adoption, and helps vulnerable children join permanent, loving families. Former foster youth represent the majority of children adopted by families earning less than 200 percent of the poverty level. This bill will make a critical difference in the ability of lower and middle-income families to adopt. I am proud to recognize National Foster Care Month by working across the aisle to improve the Adoption Tax Credit to better help more children and families benefit.”
CWLA has endorsed the bill.
Another bipartisan bill that would extend refundability for children adopted with special needs (HR 2510) was introduced in the House by Rep. Zachary Nunn (R-IA) in early April. This bill is narrower in scope than the bill introduced by Representatives Davis and Moore.
