Republican lawmakers are struggling to reform our tax system, proposing a sweeping cut in the corporate tax rate and a doubling in the standard deduction that around 7 in 10 American taxpayers claim every year.
GOP Tax Bill Rescues Adoption Tax Credit
Alongside big cuts in the country’s overall tax revenue, legislators in the House and Senate are planning to slash the itemized deductions that allow select groups of individuals to write-off specific expenses. And prospective adoptive parents found themselves on the chopping block, when GOP members of the House of Representatives proposed eliminating the adoption tax credit.
That’s not going to happen. After widespread outcry from the adoption community, both House and Senate versions of the Tax Cuts and Jobs Act will preserve the adoption tax credit, according to CNN Money. Whatever your politics, this is cause for celebration.
How The Adoption Tax Credit Helps Children
The significant costs associated with adoption can deter prospective adoptive parents from moving forward with their plans. Adopting a child can cost anywhere from $25,000 to $50,000, The Hill reports. The adoption tax credit was designed to reduce this financial burden and increase the rate of adoption throughout the United States.
First established as a $1,000 tax refund in 1981, the program was so popular that, in 2012, President Obama made the adoption tax credit a permanent part of the country’s tax code. In 2016, adoptive families were allowed to deduct a total of $13,460 from their annual tax bill to offset the costs of “qualified” adoption expenses, like the fees paid to an adoption agency.
Saves American Taxpayers (Lots Of) Money
By any measure, the adoption tax credit is a good thing for adoptive families. Its benefits also happen to spill over to the nation at-large.
More than 100,000 children are currently waiting to be adopted in the foster care system. Next year, another 100,000 children will do the same. By encouraging adoption, the adoption tax credit helps indirectly to find loving homes for these children.
It also saves the country, and millions of taxpayers, a lot of money. A series of well-regarded studies, according to the Deseret News, have found that we all pay less in social services when needy children are adopted into supportive homes. The current understanding is that, for every $1 of tax revenue that the country loses out on because of the adoption tax credit, we spend $9 less in social services for children.
Tax Bill Heads To Conference Committee
The adoption tax credit makes good economic sense. It’s encouraged tens of thousands of people to build beautiful families through adoption, while helping state and federal governments save money on social services.
And we’ve still got a ways to go before we know that the adoption tax credit will continue to help families. While both the House and Senate have passed their own versions of the tax reform bill, the two divergent laws now have to be reconciled.
That’s a job for the conference committee, the Wall Street Journal says, a group of lawmakers who will work to hammer out the remaining differences. Since both tax bills already preserve the adoption tax credit, we should be hopeful that the conference committee will follow suit.
This article is a guest post from Maxine Chalker, MSW / LSW the founder and executive director of Adoptions From The Heart, a non-denominational private adoption agency. Learn more at AFTH.org.
