A network of adoptive families, birth families, and adoption professionals which exists to improve the lives of children and others touched by adoption through support and education. UFA is actively engaged in community outreach and advocacy to raise awareness of adoption as a loving option.

Wednesday, September 25, 2013

Refundable Tax Credit Needed....find out why.

A Refundable Adoption Tax Credit
*Information taken from NCFA
What is the need?
The adoption tax credit, which can be claimed for eligible adoption-related expenses, has helped offset the high cost of adoption since the credit was established in 1997. The credit has made adoption a more viable option for many parents who might not otherwise have been able to afford adoptions, allowing them to provide children with loving, permanent families. Unfortunately, many low to moderate income families – who need it the most –do not benefit from the adoption tax credit because it is no longer a refundable tax credit as it was in 2010 and 2011.
What is the law now?
In January of 2013, we celebrated that Congress made the adoption tax credit a permanent part of the tax code, showing their commitment to supporting adoption and permanency for children. In 2010 and 2011 the credit was made refundable, allowing families to receive the full benefit of the credit regardless of their tax liability. However, refundability was not continued after 2011. Without refundability, otherwise eligible families with low to moderate incomes and accordingly low to moderate tax liability receive little or no benefit from the adoption tax credit. These are the very families who may need this support the most.
What does refundable mean?
A non-refundable credit is one in which taxpayers receive a refund of federal income taxes, but only up to the amount of taxes they otherwise had due. A refundable credit is one that a person can receive regardless of their tax liability.It is treated as a payment so the family can receive the benefit regardless of the amount of their tax liability in that year.
What will solve the problem?
The Adoption Tax Credit Refundability Act, S. 1056 and H.R. 2144, if passed, would make the adoption tax credit refundable.Restoring refundability to the adoption tax credit would ensure that low to moderate income families will receive the full benefit of the adoption tax credit. Refundability will help allow more willing families to bring children to the permanent, nurturing families they need and deserve. This one-time tax credit actually offers government cost savings in many cases. For example, providing this one-time credit to adoptive families is much less expensive than the high annual costs of maintaining a child in need of a family in foster care.
Who will this change help?
Making the adoption tax credit refundable will help:
• Children in need of permanent homes will find their way more quickly to adoptive families.
• Adoptive parents, particularly those with low to moderate incomes, will bear less financial burden when expanding their families through adoption.
• Save the Adoption Tax Credit: www.adoptiontaxcredit.org
• Adoption Advocate #21 Tax Benefits for Adoption: The Adoption Tax Credit:
• North American Council On Adoptable Children, Federal Adoption Tax Credit:
For more information contact: Megan Lindsey, Director of Public Policy & Education
National Council For Adoption

Visit NCFA to find out what YOU can do to help make the Adoption Tax Credit Refundable.

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