On September 23, the House approved, 413-0, a bill (H.R. 1057) that would make permanent the adoption tax credit that was included in the 2001 Economic Growth and Tax Reconciliation Act (P.L. 107-16). Rep. Jim DeMint (R-SC) sponsored the measure.
Under current law, families who adopt a special-needs child are guaranteed a tax credit of $10,000, up from the $6,000 credit under previous law. For all other children, adoptive families are eligible for a tax credit of up to $10,000, double the $5,000 limit previously allowed. Present law also provides an exclusion of up to $10,000 from the gross income of an employee for qualified adoption expenses paid by an employer. Families earning $150,000 or less qualify for the full adoption credits.
All of the provisions in the 2001 tax law are set to expire on December 31, 2010.
Explaining that adoptions can be “prohibitively expensive,” Rep. Dave Camp (R-MI) stated, “Licensed private adoption agencies charge fees ranging from $4,000 to $30,000. Independent adoptions can cost anywhere from $8,000 to $30,000. If the adoption tax credit is cut [to] the prior law level of $5,000, many families will not be able to afford adoptions. Money may not be able to buy you love, but in the case of adoptions, it may keep you from it.”
Although supportive of extending the adoption tax credit, Rep. Ben Cardin (D-MD) said that his “only regret about this legislation is that there is no effort to offset its cost. Relative to the other tax extensions, the cost of the adoption tax credit is relatively modest.” He added, “I support this change, and it has a modest cost, but I am sorry that we did not take advantage of this opportunity to close some tax loopholes, including those available to companies who ship jobs overseas, that could have offset easily the cost of this bill so we do not continue to add to the growing deficit.”
Sen. Jim Bunning (R-KY) has introduced an identical bill (S. 1931) in the Senate.
