WASHINGTON – U.S. Sen. Mark Warner (D-VA), a member of the Congressional Coalition on Adoption Caucus, joined U.S. Sen. Bob Casey and 23 of his Senate colleagues in sponsoring the Adoption Tax Credit Refundability Act – legislation to make the existing federal tax credit for adoption expenses fully refundable and ensure that more families can benefit from this critical support. This legislation aims to support lower-income families that are adopting as well as address the number of children “aging out” of the foster care system.

“Every child deserves a loving and supportive home,” said Sen. Warner. “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.”

The adoption tax credit was made permanent in the American Taxpayer Relief Act in January 2013. However, that law did not extend the refundability provisions that applied to the adoption tax credit in 2010 and 2011. The Adoption Tax Credit Refundability Act will restore the refundable portion of this critical support for families wishing to adopt.

According to data, Virginia ranks near the bottom of states – 49 out of 50 – when it comes to the percentage of children who “age out” of the foster care system. Virginia also has a higher percentage of older youth in foster care than the nation as a whole. This bill aims to help families seeking to adopt by removing some of the financial constraints families considering adoption face. 

Data indicate that a refundable adoption tax credit plays a significant role in lower-income families’ ability to adopt and support a child from foster care. According to the Department of Health and Human Services, one-third of all adopted children live in families with annual household income at or below 200 percent of the poverty level. Despite the common misperception that only wealthy families adopt, nearly 46 percent of families adopting from foster care are at or below 200 percent of the federal poverty level. Many of these families’ tax burdens are so low that they cannot benefit from the adoption tax credit at all unless it is refundable.

Full text of the bill is available here. 

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