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62 percent of families eligible for the adoption tax credit made too little to fully benefit without refundability

One-third of adopted children live in households with annual income at or below 200 percent of the poverty level

Washington, D.C. – Today, U.S. Senators Bob Casey (D-PA) and Kevin Cramer (R-ND) introduced the Adoption Tax Credit Refundability Act to support families wishing to adopt by easing the financial costs associated with adoption. The bill will restore the refundability provisions in the current adoption tax credit that expired in 2011.

“The more children who are adopted by loving families, the better off our Nation is,” Senator Casey said. “The Adoption Tax Credit has been a proven success in increasing families’ ability to offer permanent homes to adoptive children and this bill will allow more families to experience the joy of expanding their family through adoption.”

“As many adoptive families know, the financial cost of an adoption can be significant. This tax credit is an important benefit to encourage prospective families to adopt,” Senator Cramer said. “Shifting it from nonrefundable to refundable will allow families who experience the joy of adoption to take full advantage of the credit, regardless of their tax burden.”

The American Taxpayer Relief Act made the adoption tax credit permanent in January 2013, but did not extend the credit’s refundability provisions that were available in 2010 and 2011. Data from 2011 indicate that nearly 62 percent of families who filed for the adoption tax credit benefited from refundability. Forty-one percent of families who benefited from refundability—25 percent of all families who took the tax credit—had adjusted gross incomes under $50,000. In 2020, the adoption tax credit was worth up to $14,300.

The Adoption Tax Credit Refundability Act would restore the refundable portion of this critical support, making thousands of adopting families newly eligible for the full credit and hopefully convincing many more that they can afford to adopt. This would help families recoup the thousands they incur in court and attorney’s fees, traveling expenses, and adoption fees.

This legislation is cosponsored by U.S. Senators Sherrod Brown (D-OH), Shelley Capito (R-WV), Tammy Duckworth (D-IL), Dianne Feinstein (D-CA), Josh Hawley (R-MO), Cindy Hyde-Smith (R-MS), Mark Kelly (D-AZ), Amy Klobuchar (D-MN), James Lankford (R-OK), Ben Ray Lujan (D-NM), James Risch (R-ID), Mike Rounds (R-SD), Marco Rubio (R-FL), Tim Scott (R-SC), Debbie Stabenow (D-MI), Chris Van Hollen (D-MD), Mark Warner (D-VA), Elizabeth Warren (D-MA), Sheldon Whitehouse (D-RI), Roger Wicker (R-MS), and Ron Wyden (D-OR).

Read more about the Adoption Tax Credit Refundability Act here.