All in the family: Tax credit refund would encourage more adoptions

(© Erin Cadigan –

New legislation aims to support lower-income families seeking to adopt by making the federal tax credit fully refundable.

The legislation also addresses the number of children aging out of the foster care system, according to a press release.

The Adoption Tax Credit Refundability Act is sponsored by 25 Senators, including Virginia’s Mark Warner and Bob Casey of Pennsylvania.

“Every child deserves a loving and supportive home,” Warner said in the press release. “This legislation will enable more families to claim the adoption tax credit and pave the way for more children to be adopted into safe, stable, caring homes.”

In January 2013, the adoption tax credit was permanently made part of the American Taxpayer Relief At but did not extend refundability provisions to apply to the adoption tax credit in 2010 and 2011. The new legislation will restore refundability and support families who wish to adopt, according to the press release.

Data concludes that Virginia is 49 out of the 50 states when it comes to percentage of children who “age out” of the foster care system. A higher percentage of older youth in foster care is also in Virginia compared to the rest of the country. According to data, a refundable adoption tax credit would play a significant role in lower-income families’ ability to adopt. One-third of adopted children live in families with an annual income at or below 200 percent of the poverty level, according to the Department of Health and Human Services. Nearly 46 percent of families who adopt children are at or below 200 percent of the federal poverty level. If the adoption tax credit is not refundable, some of the families’ tax burdens are too low to qualify.