The so-called "fiscal cliff" bill signed by President Obama Thursday makes a tax credit for adoption permanent.
As Religion Today explained, "Under IRS rules, an adoptive family can claim adoption expenses — court costs and adoption agency fees, among others — up to the maximum amount allowed under the credit. Since many adoptions cost $20,000 and up, the tax credit simply makes the expensive process more affordable."
While the tax credit has become permanent, it is not unchanged. Beginning with 2012 tax filings, it is not refundable. So people who have no tax liability will not get the credit, which can only be used to offset tax liability, according to CBN News.
"Advocates lobbied hard to preserve the $10,000 federal adoption-tax credit, which is scaled for inflation and was worth a maximum of $12,650 for 2012. But they did not succeed in making the credit refundable for low- and middle-income families whose tax liability is less than the credit," writes Rita Price of the Columbus Dispatch.
“It’s basically good news,” Rita Soronen, president and CEO of the Columbus-based Dave Thomas Foundation for Adoption, told that newspaper. “The tax credit passed, and it was made permanent. But refundability is off the table now.”
That matters especially, Soronen said, because most children who are adopted out of foster care are adopted by families with lower incomes. Those families "will benefit little, if it all, from the credit,” which may make it less likely some children will be adopted from the child welfare system.
The credit is worth an estimated $759 million.
Families with incomes under $150,000 are eligible for the full credit, Price said, while it diminishes gradually at higher incomes. The adoption credit was first offered in 1997 and has been extended each year. Action this week made it permanent.
The tax credit was one of many breaks approved as part of the bill. The Washington Times noted that both parties "clamor for preferred breaks. The year-end debate has become so routine that it comes with a label: the tax-extenders package."
"The best thing about the new tax regime is that it makes permanent many items that had limped from one year-end extension to another," wrote Linda Stern for Reuters. "That includes income tax rates, tax rates on capital gains and dividends (including a tasty zero percent tax rate on capital gains and dividends for those below the 25 percent tax bracket), marriage penalty relief, Coverdell education savings accounts and more."
EMAIL: firstname.lastname@example.org, Twitter: Loisco
- Disney reportedly pulls new 'Brave' image of...
- Men experience the pains of labor through...
- Disney's 'Brave' makeover sparks fury from...
- Former middle-class moms choose new identity...
- Fly a flag for Cody: Army confirms Utah man...
- Hundreds of volunteers tackle service...
- Psychologist calls doctor accused of killing...
- A crash course in 'Star Trek' for non-Trekkies
- Utahn, castaway Dawn Meehan reflects on... 15
- Angelina Jolie announcement leads to... 12
- L.A. filmmaker tries to re-brand... 10
- Disney reportedly pulls new 'Brave'... 9
- Utah lawmakers look to regulate child... 8
- New app helps consumers purchase... 8
- Linda & Richard Eyre: Once in a while,... 5
- Man exonerated after 15 years in prison... 5