Some great news from Washington, DC! When Congress passed the American Taxpayer Relief Act of 2012 (averting the so-called fiscal cliff), the adoption tax credit was made permanent.
Since it was established in 1997, the adoption tax credit has helped thousands of American families offset the high cost of adoption or meet their adopted children’s special needs. The credit was set to virtually disappear as of December 31, 2012.
The bill signed into law by President Obama on Wednesday permanently extends the adoption tax credit and income exclusion for employer paid or reimbursed adoption expenses. The projected maximum amount of the adoption credit for 2013 is expected to be around $12,770.
The benefits of the adoption tax credit reach beyond the children who are adopted. A 2006 study cited by the Children’s Bureau found that taxpayers save as much as $126,000 for every child who is adopted instead of remaining in long-term foster care. Significant savings to society are also achieved because children who are adopted fare better than those who live out their childhood in foster care.
With more than 100,000 children in U.S. foster care waiting to be adopted, and countless millions of children worldwide without families, the continuation of the adoption tax credit helps provide love, safety, and permanency to many of these children.
For more information on the adoption tax credit, visit the website of Save the Adoption Tax Credit.