Bush Tax Bill Fulfills Campaign Pledge to Aid Children and Families

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Tom Bliley Adoption Credit is $10,000 and is Permanent

Dateline: Sunday, May 27, 2001

Prospective adoptive families scanning the news today and finding no information about the adoption tax credit can relax. Sources on Capitol Hill said Saturday that the Republican-controlled Conference on the President's proposal to return some of the tax surplus to citizens included the credit in the package.

According to these sources, tucked into the bill that will be signed into law by President Bush as early as Monday are the major features that were part of the "Hope for Children Act," the proposal championed by Rep. Tom Bliley, the long-time Republican adoption advocate from Richmond, Virginia.

The bill fulfills a campaign pledge by President Bush to make the adoption tax credit permanent for all adoptive families and to expand the value of the credit to taxpayers. The credit was set to expire for all but special needs adoption from the public foster care system as of the end of 2001, putting an estimated 40,000 potential adoptions at risk of losing benefits.

The tax credit will now provide a maximum of $10,000 per adoption for all families, up from $6,000 for those adopting a U.S. child with special needs from the public foster care system, and up from $5,000 for all other adoptions.

The number of moderate-income families who can benefit increases because benefits begin to phase out at $150,000 Adjusted Gross Income rather than the current $75,000, with the ceiling set at $190,000 modified AGI.

Families adopting U.S. children with special needs would have a new benefit, starting in 2003, providing that regardless of whether the taxpayer has eligible expenses in that year or not, if the adoption is finalized, the credit applies.
Full details of the adoption tax credit provisions, which many are calling the "Tom Bliley Adoption Credit," and which passed the House in a different form earlier this month by a vote of 240 - 0, will be available soon.

The Conference Report is available online in the Congressional Record.

S. 148
The Hope for Children Act
Introduced in the Senate
by Senators Craig (R-ID), Landrieu (D-LA), and Johnson (D-SD)

H.R. 622
The Hope for Children Act
Introduced in the House
by Representatives King (R-NY), DeMint (R-SC), Oberstar (D-MN), Bachus (R-AL), Pryce (R-OH)

A summary

Makes an adoption tax credit and an exclusion from income of amounts provided through an employer adoption assistance program permanent law.

Allows a tax credit for allowable expenses up to $10,000 in non-special needs adoptions, adjustable for inflation after December 31, 2002.

Allows a $10,000 tax credit for each special needs adoption, adjustable for inflation after December 31, 2002.

Allows an exclusion from gross income of amounts up to $10,000 for qualified adoption expenses for non-special needs adoptions or up to $10,000 for special needs adoptions paid by an employer to an employee through an adoption assistance program, adjustable for inflation after December 31, 2002.

Phases out the allowable amounts for both the credits and the exclusion between adjusted gross income of $150,000 and $190,000.
The full text of the legislation can be viewed at http://thomas.loc.gov/home/c107query.html (enter S. 148 in the appropriate search box)

Source: American Academy of Adoption Attorneys
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