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Save the Adoption Tax Credit!

Posted by on Dec. 4, 2012 at 9:13 PM
  • 25 Replies
2 moms liked this

I'm guessing you all know, but the adoption tax credit is set to expire the end of this year, that means us adoptive couples who won't adopt until 2013 or later won't be able to benefit from it (and its a huge refund....over $12,000...which we all know can help all of us!). If you're like me and really, really, really want this bill to be renewd, take a few seconds to contact your state senators and representatives and ask them to renew the adoption tax credit bill.

Here's a link to find and contact your state senator/representative:  http://www.contactingthecongress.org/   (just go to the site, type in your zipcode, and a list of your specific senators and representatives - once you click on the person's name, a link will show up for a contact form - click on the link, put in your info, and then paste the following letter into the form)

Here's a sample letter you can copy and paste right into the contact form: (Things in red need to be changed)

Dear Senator/Representative NAME:

I am writing to ask you to support the adoption tax credit by becoming a cosponsor of S. 3616/H.R. 4373 (S=senate, H.R.=representative). The adoption tax credit is set to expire on December 31, 2012. Since 1997, the adoption tax credit has helped tens of thousands of parents offset the high cost of adoption, making it possible for them to provide children with loving, permanent families.

The adoption tax credit is especially important to me and my family because... (you can add in anything you want here or you can just delete this sentence/paragraph.)

If Congress does not take action, the adoption tax credit as we know it will expire at the end of 2012. The credit will be reduced to $6,000, and will only benefit the few families that adopt children with special needs and have qualified adoption expenses. Most families adopting children from foster care, intercountry adoption, and domestic infant adoption will not receive any benefit. Without the adoption tax credit, many parents hoping to adopt will be unable to do so, and others will face great financial hardship. The adoption tax credit is essential to ensuring that as many children as possible find the forever families they deserve and ensuring that those families are in a more stable financial position to provide an environment where children can thrive.

The adoption tax credit must be extended to help as many children as possible find the permanent, loving family they need and deserve. And for 2012 and future years it should be made refundable again so that most adoptive families will benefit from it. The best adoption tax credit would be permanent, refundable, inclusive of all types of adoption, and remain a “flat” credit for children with special needs. For specific information on the tax credit, please visit http://adoptiontaxcredit.org/faqs/.

On behalf of the countless children waiting to be adopted, and the many thousands of families that stand to benefit from the adoption tax credit, thank you for your attention to this important issue.

Sincerely,

NAME
CITY, STATE
EMAIL ADDRESS/PHONE #


Pass this on to as many people as possible! The more people who contact their senators and representatives, the more chances we have to get the adoptive tax credit bill renewed!

by on Dec. 4, 2012 at 9:13 PM
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Replies (1-10):
SarahSuzyQ
by Sarah on Dec. 4, 2012 at 9:35 PM
Could you share more information about the specific bill? I didn't know there was a bill in process to address this.

My understanding is that most families adopting from foster care will still benefit under the (reduced) 2013+ tax credit, because it will be available to families who have done domestic adoption of children with special needs. Though it varies by state, this is in fact the majority of children adopted from foster care. So that might not be quite accurate in your original letter.

I strongly support tax credit going towards foster care adoptions, as there are thousands of children who are just waiting for a forever family... And as we're talking about taxes, that's the money that pays for foster care. It is the best of all worlds, especially for the children, if we can take more steps towards finding permanency for kids in care.
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zenoria
by Member on Dec. 5, 2012 at 7:45 AM
The thing is, there are many, many families who are already in process who expected they'd be eligible for at least a credit in their taxes, even if not a refundable one. It's wrong to pull the rug out from those families in the middle of the process like that. Our adoption took years, and one of our children does have a heart issue, so could be classified as SN but under the 2013 and forward credit we'd receive less or nothing than if we'd finalized in 2011. It isn't the case that the only 'worthy' form if adoption is Foster-adopt. It already costs very little to do that and families who take SN kids often also get an additional subsidy. Kids are in need all over, not just in the US foster system. If the credit is going to sunset, it should be after a number of years, not after being renewed/changed every 12 months.
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SamsMomSays
by Member on Dec. 5, 2012 at 7:48 AM
Bump for later
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TylerandKate
by Member on Dec. 5, 2012 at 7:56 AM

Here are a few links for more info on the bill for the Adoption Tax Credit.

http://adoptiontaxcredit.org/

http://adoptiontaxcredit.org/faqs/

http://www.gislason.com/blog/2012/10/22/dramatic-changes-to-adoption-tax-credit-for-2013

http://www.reuters.com/article/2012/04/24/us-column-adoption-taxcredit-idUSBRE83N0VV20120424

All families who adopt, no matter if it's through infant adoption, foster-to-adopt, international adoption, etc. deserve to be helped financially. Adoption is very expensive - some couples have to save up for many years just to even be able to adopt 1 child. While other couples will have added expenses after adopting a special needs child and need the help. Everyone deserves financial help so that adoption can be more affordable for everyone.

SarahSuzyQ
by Sarah on Dec. 5, 2012 at 8:05 AM
It has been set to revert to the $6k level for a number of years, though it was slightly expanded with the affordable care act. If those families expected a credit, their agency was being dishonest with them. I have been aware for two years that if we did not adopt in 2011 there would be no refund. Sure enough, we adopted in mid-2012. I know a number of families who should reasonably have been able to finalize in 2011 and were held back by court or CW delays, so now will get no refund. It's frustrating, but it's really not the reason we are adopting.

I don't think any group of kids is more "worthy" of being adopted. Many, many children the world over need homes. I hope we can all agree on that. I am simply not certain that it's the best tax policy as the credit currently works... Especially as I read about agencies raising their fees to match the credit amount, particularly in private adoption.

US taxpayers and government have already made a commitment to kids in foster care, that they will have a family after we have taken away their birth family (for good reason). A small credit towards adoption would seem to match that commitment.

I believe there is a similar petition to the OP on whitehouse.gov for those interested.


Quoting zenoria:

The thing is, there are many, many families who are already in process who expected they'd be eligible for at least a credit in their taxes, even if not a refundable one. It's wrong to pull the rug out from those families in the middle of the process like that. Our adoption took years, and one of our children does have a heart issue, so could be classified as SN but under the 2013 and forward credit we'd receive less or nothing than if we'd finalized in 2011. It isn't the case that the only 'worthy' form if adoption is Foster-adopt. It already costs very little to do that and families who take SN kids often also get an additional subsidy. Kids are in need all over, not just in the US foster system. If the credit is going to sunset, it should be after a number of years, not after being renewed/changed every 12 months.


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zenoria
by Member on Dec. 5, 2012 at 8:19 AM
The IRS has been consistent for years in saying the sunset will likely be averted because it is renewed every year. If it is/was worthwhile to have a refundable expanded credit for adoptions finalized in 2011, why not for those started prior to 2010 and finalized in 2012? What in your opinion makes those APs different in that they should have expected little or no credit for adopting?






There are already HUGE subsidies for foster-adopt, without an additional tax credit. Any family who adopts should be able to be financially bolstered, as the costs for pretty much every other type of adoption are far far greater than foster adopt. In our state, foster adoptions also get ongoing $ for years as an incentive. As you say, it's not the money that makes people adopt, or at least it shouldn't be, no matter the type of adoption. However, no family should be put in financial jeopardy because of politics or because their adoption choice is now the one that's out of vogue. Very few adoption processes take less than 1 year.
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TylerandKate
by Member on Dec. 5, 2012 at 8:28 AM

Landrieu Introduces Bill to Make Adoption More Affordable

September 21, 2012

WASHINGTON—U.S. Senator Mary L. Landrieu, D-La., today introduced the Making Adoption Affordable Act to support families that have made the wonderful decision to adopt. The Adoption Tax Credit (ATC) helps defray the sometimes high administrative fees associated with adoptions, ensuring that families that want to adopt are not discouraged by the high cost of the process. The Making Adoption Affordable Act will make the ATC a permanent part of the tax code and make it refundable, which would allow adoptive families to receive a tax refund in excess of their tax liability. Original co-sponsors of the legislation include Sens. Roy Blunt R-Mo., Ben Cardin, D-Md., and Kay Bailey Hutchison, R-Texas.

"For families who have generously opened their hearts and homes to a child, the Adoption Tax Credit gives them important assistance along the journey. My husband and I are blessed with two precious, adopted children, and I am hopeful that this credit will encourage others to consider enlarging their families through adoption," Sen. Landrieu said. "I am committed to extending the Adoption Tax Credit and look forward to working with my colleagues on both sides of the aisle to support families who make the wonderful decision to adopt."

"More than 100,000 children in the United States currently live in foster care and there are countless more children who are orphaned or abandoned around the world," Sen. Cardin said. "Adoption provides safe and permanent homes for children, and defraying the costs of adoption through the tax credit is a vital tool to ensure these children become part of a loving, stable family. The costs associated with adoption can quickly grow, particularly when a child has special needs, and this credit helps families who otherwise might not be able to afford it maintain their economic security as they begin raising their children."

The Making Adoption Affordable Act:

 

  • Permanently expands the ATC and provides up to $13,170 for covered adoption expenses, adjusted for inflation;
  • Makes the ATC refundable, which particularly benefits families adopting from foster care for two reasons:

 

Lower Expenses. Those adopting from foster care incur lower administrative expenses than those adopting from an agency or from a private adoption attorney. Refundability permits a family adopting from foster care to receive support to care for a child even though the actual cost of adoption was minimal;

• Lower Tax Liability. Families adopting out of foster care statistically are of lower income than those adopting with an agency or internationally. A lower income means that the family is in a lower tax bracket, thus the ATC is more likely to be in excess of a family's tax liability.

The ATC was first passed in 1996 and since then, preserving and expanding the ATC has been a bipartisan priority of Congress and the White House.


Making Adoption Afforadable Act is the same thing as S. 3616/H.R. 4373.



There are now bills in both the House (HR 4373) and the Senate (S 3616) that would accomplish the goal of an adoption tax credit that is inclusive, flat for special needs adoptions, refundable and permanent. (Taken from http://adoptiontaxcredit.org/)   (See original post for links that describe what those terms mean.)


SarahSuzyQ
by Sarah on Dec. 5, 2012 at 8:46 AM

I would actually be really interested in the philosophy behind the tax credit ever being refundable. I don't think those who finalized in 2007-2011 are any more "deserving" of a $13k refund than the rest of us. Selfishly, I would love to see the refund restored so my son could have a huge head start on saving for college and/or later in life needs (health, mental health, etc.) I go back and forth on the whole situation, so I'd love to hear other perspectives.

I'm just not sure it's sustainable to keep giving these huge refunds when our federal budget continually cuts social services, education, etc etc. Where are the funds coming from?

What we really need is a massive tax reform. It will be interesting to see if we get anything like that in the coming months.

Adoption itself could also use some oversight and reform. If agencies really are raising fees because they know that their clients will get a bigger refund, that is wrong. That is profiteering from what is supposed to be about a child in need.

I also understand that other governments often tack on unnecessary "administrative" fees, or at least that's why my IA friends have experienced... I'm not sure we have the capability to address that, since not even every nation is in compliance with the Hague convention. And of course the cost of travel, visas, etc is huge in IA. Again, not saying that these children don't deserve help or support... They do! I know that your kids clearly needed to come home to you just from the little you have shared of your story.

Is it the government's job to subsidize any of this? I'm genuinely uncertain.

Quoting zenoria:

The IRS has been consistent for years in saying the sunset will likely be averted because it is renewed every year. If it is/was worthwhile to have a refundable expanded credit for adoptions finalized in 2011, why not for those started prior to 2010 and finalized in 2012? What in your opinion makes those APs different in that they should have expected little or no credit for adopting?






There are already HUGE subsidies for foster-adopt, without an additional tax credit. Any family who adopts should be able to be financially bolstered, as the costs for pretty much every other type of adoption are far far greater than foster adopt. In our state, foster adoptions also get ongoing $ for years as an incentive. As you say, it's not the money that makes people adopt, or at least it shouldn't be, no matter the type of adoption. However, no family should be put in financial jeopardy because of politics or because their adoption choice is now the one that's out of vogue. Very few adoption processes take less than 1 year.


zenoria
by Member on Dec. 5, 2012 at 8:53 AM
The tax credit is also in jeopardy, so it wouldn't be possible to take the credit over a number of years anymore (it is now structured such that it is not refundable but rather a limited credit per year with a max # of years). If Mr. Obama felt it was the right thing to do to make the credit refundable, as you say, why not for other years? I hear what you're saying,and I agree that there needs to be tax reform. But I don't think the way forward is to punish families who were/are in process before 2012.
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ambermario4ever
by on Dec. 5, 2012 at 8:56 AM
1 mom liked this

I want to adopt one day. But I don't care if I get a tax credit or not for it. I will be adopting to give a child a better life and loving family not to get a tax refund.

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