January 3, 2013 Print

Congress Approves Adoption Tax Credit

by Bethany Monk

Congress passed legislation late Tuesday night extending the adoption tax credit, which will continue to help adoptive families cover expenses related being a “forever family” for children in need.

The American Taxpayer Relief Act contains a provision that extends the adoption tax credit, set at $10,000 per year. The provision also makes the tax credit permanent. It will become a law with President Obama’s signature.

“In years past, the adoption tax credit was extended on a yearly or semi-annual basis, making a less secure benefit for adopting families,” said Carrie Gordon Earll, senior director of Issues Analysis for CitizenLink. “The change to permanent status is key for making adoption possible for the more than 100,000 children in U.S. foster care, and the millions of children worldwide who need a family of their own.” 

Megan Lindsey, assistant director of policy for the National Council for Adoption (NCFA) believes Congress should be commended for prioritizing children and families.

“The adoption tax credit is an important layer of support for families who adopt — it helps ensure children find their way to safe, stable, loving and permanent families,” Lindsey explained. “We are grateful to Congress, the Obama administration and our many partnering advocated in the Save the Adoption Tax Credit Working Group for their tireless efforts on behalf of this important tax credit.”

Earll said the tax credit will most likely range between $10,000 and just below $13,000 a year with adjustments for inflation.

“Adoption is something families would likely do anyway,” Earll said.  “This tax credit provides incentive: (it helps) when you know there’s going to be help with those expenses —especially with a special needs adoption — that’s a real incentive for parents.”

The tax credit applies to all adoptions — domestic and international, Earll explained, calling it “an important piece of helping orphaned children find forever families.”

There were 153 million orphans worldwide in 2011, according the UNICEF’s State of the World’s Children.

Learn more about the American Taxpayer Relief Act.

Read “Adoption: More than a Social Justice?”

View the Adoption and Foster Care Analysis and Reporting System report.