Care About Kids? You Should Want to Save This Tax Credit



This is a very good article from the New York Times on the real impact of the Adoption Tax Credit. Creating a Family is proud to stand with Save The Adoption Tax Credit in the efforts to protect this credit that benefits so many families built by adoption. Here’s an excerpt:

“We were able to pay some fees associated with adoption in cash. With our older son, now 8, we became parents much more quickly than we’d anticipated, and shuffled the balance of the expenses onto a credit card. That piece of debt quickly became abstract, as debt tends to; it was simply part of the larger financial picture that became more complicated once we had a small baby: health insurance, child care, clothes, diapers, those ridiculous swim and music classes that parents like us always seem to fall for. It was helpful to remember that this credit was in the offing; claiming it, and watching my tax bill effectively eliminated, felt like magic.

Giving money to charity or converting your home to green energy are behaviors deemed beneficial enough to society that they’re worth encouraging via tax credits and deductions. Since 1996, the federal government has determined that making a family via adoption is similarly beneficial to society, and rewarded that choice with a tax credit….

My family’s security and survival were not contingent upon this credit by any means, but we are undoubtedly better off for it, a rung higher on the ladder to the middle class, an inch nearer to being able to send our sons to college. I am pained to imagine the family that wants to adopt but decides it can’t because of the costs….

Adoptive parents are not saviors deserving of some special subsidy. (Though I would argue that those families who adopt children with special needs, which is not what my family has done, deserve the wholesale financial support of the federal government.) But tax incentives reward actions that positively affect society. Creating stable family units — which will, in turn, raise yet another American taxpayer — is as worthy as installing rooftop solar cells or leaving your fortune to your church.

In the context of the federal budget, the $355 million that this credit costs the country is a paltry sum. No politician who is willing to discard this tax rule can claim to have the interests of American families at heart.”

Do yourself a favor and read the whole article. Then share it. Specific ideas for how to share your message with your representatives can be found on the Take Action! page here.

08/11/2017 | by News | Categories: Adoption, Adoption News | 2 Comments

2 Responses to Care About Kids? You Should Want to Save This Tax Credit

  1. Avatar Need to know says:

    So I have a couple of questions about the Adoption Tax Credit. My Congressman staffer told me that a big problem with the Adoption Tax Credit is the IRS management of the credit. It has brought more lawsuits in the US Tax Courts than they ever imagined. So many so, that it has increased the administrative costs for the government over actually losing tax revenue. I know in our case with the IRS, the US Tax Court found in favor of us and forced the IRS to pay us a penalty. Then the IRS tried to tax us again on the credit, the interest, and the penalty and they lost again in Tax Court. So is the problem here the actual Tax Credit or the IRS mismanagement of the whole Adoption Tax Credit?

    My second question is that it appears that all adoption agencies/professionals have raised their fees as a result of the Adoption Tax Credit. Basically, saying you’ll get the money back from the IRS when you file your taxes. Other agencies are saying to do away with the credit because there are too many couple and not enough viable adoption situations. What is the real story? I feel like both sides are misleading everyone and I like more accurate information on what the adoption industry is doing, how their fees are set, and what is/was the adoption industry fee adjustment after the Adoption Tax Credit went into effect and what will happen to fees if it goes away.

    • Dawn Davenport Dawn Davenport says:

      Need to know: I don’t have a definitive answer to your questions, but can share my thoughts. I think what the congressional staffer was referring to is only applicable for the 2 years (2010 and 2011) that the Adoption Tax Credit was refundable. It was a new tax refund and the IRS had problems figuring out how to administer it. Refundability was taken away after 2011 and I’ve not heard that there are any issues with the IRS administering the Adoption Tax Credit now.

      I have not seen that agencies have raised their fees because of the Adoption Tax Credit. This tax credit is only applicable if you have enough federal tax liability, so does not apply to everyone. As to having too many families and too few children–that is only true for domestic infant adoption, and not foster care or international adoption.

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