Joint Council Update - Adoption Tax Credit Refundability Act

Last Thursday Senators Bob Casey and Mary Landrieu, and Rep. Bruce Braley of Iowa introduced the Adoption Tax Credit Refundability Act of 2013.  These bills follow the successful effort to reinstate the adoption tax credit which Congress made permanent in late 2012.  The Adoption Tax Credit Refundability Act of 2013 will expand the number of children benefiting from adoption by supporting adoptive families through full refundability.

The Adoption Tax Credit Working Group (ATCWG), of which we are a founding member, has worked to educate Members of Congress on the need to make the tax credit fully refundable.  Visit the ATCWG’s website and Facebook page to learn more about refundability and the ATCWG’s efforts.  The ATCWG  will be developing talking points and advocacy strategies and will post more information soon to ask members of the adoption community to become fully engaged. 

We extend our thanks to Senators Casey and Landrieu and Representative Braley for their leadership and work to ensure that the adoption tax credit is made refundable.   We also thank the many Joint Council Partners who are members of the ATCWG and for their continued support.

Best Wishes,

Tom DiFilipo

P.S.  Senator Landrieu’s statement on the legislation can be found below.

-------------------------------------------------------------------

Dear Adoption Leader,

My husband and I are blessed with two precious, adopted children, and I know the Adoption Tax Credit encourages many others to consider expanding their own families through adoption. Although the tax credit was made permanent in January, the law did not extend the refundability provisions that applied in 2010 and 2011, allowing the full use of the tax credit. 

Last week, I joined my colleagues to introduce the Adoption Tax Credit Refundability Act to make the Adoption Tax Credit fully refundable.

Without the tax credit being refundable, many adopting families can’t fully utilize the benefits of this credit to make adoption a reality. This change will especially help families that want to adopt foster youth, finally providing them with a permanent and loving family and ensuring foster care is only temporary.

I am committed to making the Adoption Tax Credit refundable and look forward to working with my colleagues on both sides of the aisle to continue to support families who make the wonderful decision to adopt.

Read the Towanda, Pa., Daily Review’s editorial in support of the Adoption Tax Credit Refundability Act here or below.

Sincerely,

The Daily Review: EDITORIAL: 'Adopt' the Tax Credit

May 28, 2013

The reality of adoption in America and its perception in the pop culture are widely divergent. Due to the publicity attending Russia's use of international adoptions for political purposes, and the attention that often attends adoptions by celebrities, the day-to-day issues often are obscured.

Coverage of celebrity adoptions leads many Americans to view adoption as the province of the wealthy, but according to the U.S. Department of Health and Human Services, a third of all adopted children live in households with incomes less than 200 percent of the federal poverty level. Among households that adopt children from foster care, 46 percent are in that income range.

For many families, then, adoption poses a huge financial challenge. To help them, Sens. Bob Casey and Mary Landrieu, and Rep. Bruce Braley of Iowa, have introduced the Adoption Tax Credit Refundability Act of 2013.

A tax credit to encourage adoption was included in the American Taxpayer Relief Act, which was passed in January. Because a high percentage of adoptive families have low incomes, however, their tax burden is too low to make them eligible for the adoption tax credit.

The new bill would make the credit refundable to the adoptive parents despite their low tax burden, as it was in 2010 and 2011.

According to the IRS, of filers claiming the adoption tax credit in 2011, 62 percent benefitted from the refundability provision and 25 percent of all filers claiming the credit had adjusted gross incomes lower than $50,000. Clearly, refundability is an important incentive for families to adopt children.

Making the tax credit refundable will create some cost for the federal government, but it long has been demonstrated that the cost of such credits is substantially less than the aggregate costs to the government of foster care.

Congress, especially those members who claim a pro-life position, should vote for the credit to help make adoption as affordable as possible to as many prospective adoptive families as possible.

Please contact Sen. Landrieu at the office nearest you.