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The Adoption Tax Credit Might Have Been Saved, but It Still Needs to Be Fixed

Like the Child Care Tax credit, the Adoption Tax Credit has a long way to go before it can help enough people.

Representative Kevin Brady

When Fatherly spoke to Becky Weichhand, the Executive Director of the Congressional Coalition on Adoption Institute, yesterday, she wasn’t sure what would happen to the Adoption Tax Credit in the GOP’s tax reform bill. Signed into law by President Clinton in 1996, the Adoption Tax Credit helps defer the costs of adoption and child-rearing ⏤ up to $13,570 per child ⏤ for an estimated 14,000 families each year.

Despite the credit’s bipartisan support (the idea was actually part of the Republican’s Contract With America), however, it was left out of the original iteration of the GOP tax bill. Perhaps a commentary on how much the GOP has changed in 25 years, the reasons for its omission vary — although some of them are well-intentioned. Simply, many advocates and politicians don’t believe the Adoption Tax Credit does enough for kids. And one of those politicians is the man at the forefront of the tax bill battle, chairman of the Ways and Means Committee, Representative Kevin Brady, who has two adopted children of his own.

READ MORE: How to Adopt a Child, an Uncomplicated Guide

A lot of senators and members of the House are shocked that Republicans would cut the Adoption Tax Credit, especially since their values are often pro-family, pro-adoption,” says Weichhand.

Luckily, the CCAI’s fight to educate and connect senators with families who benefit from the tax credit was successful. Late last night, the credit was reinstated in both the House and Senate versions of the tax bill. Parents, some of whom would have been denied the credit if their adoption was finalized after the bill was signed into law, sighed in relief. 

Brady has been vocal about his adopted kids but that didn’t stop him from preventing the tax credit from being killed when the bill was drafted. His argument instead was that the tax credit is not working and the general child tax care credit would help more families, whether they had adopted their children or not. Also, there’s concern that the ATC as it is currently written inhibits people from adopting children out of foster care, pushing them instead toward private adoption agencies to take advantage of the tax write off. 

“What I think the chairman means when he says the credit isn’t working,” says Weichhand, “is that it’s not as accessible for low-income families who tend to be foster families and foster-to-adoptive families.”

Representative Brady is right that the Adoption Tax Credit should help more people in need. As it stands, it’s nonrefundable, which means that it can’t lower your tax bill below $0. And lower-income families with adopted children can’t claim it because they don’t make enough money, even though they accrue real expenses as a result of adopting a child through the foster-care system. Weichhand says the credit should be made refundable and thus accessible to more parents, not eliminated.

“’It’s not working, so, therefore, let’s do nothing,’ doesn’t seem to make any sense to a lot of advocates,” says Weichhand, adding: “I think they’re trying to figure out how they can protect support for foster-care adoptions. Unfortunately, it seems like they might be pitting them against private adoptions, which is disappointing to the child-welfare community.” 

That said, at least the conversation has been re-focused on expanding access to the credit, rather than the fight to save it all together.