This bill changes the federal adoption tax credit so it is refundable. It moves the current adoption credit rules (redesignated from section 23 to section 36C) into the part of the tax code that covers refundable credits. The bill updates many cross-references in the tax code, removes a subsection tied to the previous nonrefundable treatment, and renumbers some subsections. It also requires Treasury to issue regulations and guidance, and to provide a standardized third-party affidavit to verify legal adoptions and adoptions of children with special needs. The changes apply to tax years beginning after December 31, 2024. A transitional rule adds any unused adoption credit carryforward from the prior year to the credit available in the first year the new refundable rule applies.
If you pay qualified adoption expenses, the credit could become refundable. That means if the credit is larger than your tax owed, you may receive the extra as a refund. The bill calls for a standard third-party affidavit to help verify adoptions, including those involving children with special needs. The rule takes effect for tax years starting after December 31, 2024. If you had an unused adoption credit from the year before the change, that unused amount is added to your credit in the first refundable year.
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No publicly available information in the bill text or metadata describes proponents' arguments or stated reasons for the change.
No publicly available information in the bill text or metadata describes opponents' arguments or objections.