A compromise was reached and the President signed the “Fiscal Cliff” bill today, January 2, 2013, which had a provision for th eAdoption Tax Credit. The new law makes the Adoption Tax Credit a permanent part of the Internal REvenue Code. In the past, the Adoption Tax Credit was not permanent and it included a sunset provision that caused it to “expire” for lack of a better term.
The Adoption Tax Credit allows families to claim a tax deduction for their adoption expenses. Adoption experts around the country had pushed for it to be a refundable tax credit but that fature did not survive negotiations and the bill was passed withoiut the refundanble language as a compromise. The tax credit is claimed to be a benefit of billions of dollars to families who will adopt in the future.