Estimated read time: 3-4 minutes
- Utah Rep. Blake Moore introduces legislation to make adoption tax credits fully refundable.
- The bill aims to help low-income families adopt by offsetting adoption costs.
- Bipartisan support and endorsements from 98 organizations highlight its widespread backing.
WASHINGTON — Low-income families could face fewer obstacles to adopt children and receive higher tax credit refunds under new legislation being introduced by Utah Rep. Blake Moore in Congress.
The Adoption Tax Credit Refundability Act, which lawmakers introduced last week, would seek to remove income barriers by making current adoption tax credits fully refundable. In doing so, families with little or no federal income taxes can still receive the refund to help offset costs of adoption.
"Even before joining Congress, I have been committed to supporting and engaging with the adoption community in Utah," Moore said in a statement. "In learning more about their priorities and challenges, it is clear that many families cannot adopt due to financial barriers. … This bipartisan bill will make the adoption tax credit fully refundable so that low- and middle-income families can receive the full value of the credit, making it easier for them to open their homes to children in need of forever families."
The Adoption Tax Credit helps to offset some of the costs of adoption, such as court and attorney fees, travel expenses and other costs that are directly related to the "legal adoption of an eligible child," according to the IRS. However, the credit is nonrefundable, meaning families without federal income taxes, which is common for low- and middle-income families, can't claim the full credit.
The tax credit guidelines particularly affect families with annual incomes between $30,000 and $50,000, according to Moore's office.
For example, families earning between $0 and $40,000 received "essentially no credit" in 2022, according to data cited by the lawmakers. In the same time period, families earning between $40,000 and $50,000 used an average of $2,386 in credits in one year, amounting to $14,316 over six years.
That comes in far below families earning between $100,000 and $200,000 who used an average of $8,236 a year, amounting to $16,472 over the course of two years.
Lawmakers have raised concerns about those discrepancies, arguing it creates financial barriers that could prevent families from wanting to adopt. That's especially problematic, lawmakers say, as about half of the children adopted from foster care live with families with incomes at or below 200% of the federal poverty line.
"As co-chair of the Foster Youth Caucus and an adoptive parent myself, I understand the need to remove this barrier by offsetting these burdensome costs," said Rep. Don Bacon, R-Neb., who signed on to the legislation. "By making the adoption tax credit fully refundable, this bill makes it easier for families to adopt and gives our nation's youth a safe, loving and permanent home. I thank my co-leads for their partnership on this common-sense, bipartisan legislation that is desperately needed today."
The legislation has already received bipartisan support in both chambers of Congress and has been endorsed by 98 state, local and national adoption advocacy organizations.
"Adoption is a true joy for families, but it is not without significant financial cost," Sen. Kevin Cramer, R-N.D., one of the co-sponsors of the Senate bill, said in a statement. "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."
