Why are Republicans Killing the Adoption Tax Credit?

Adoption advocates are criticizing the removal of the adoption tax credit. But Rep. Kevin Brady says the credit isn't necessary.

House Ways and Means Committee Chairman Kevin Brady, R-Texas, center, is interviewed as takes a break from the debate over the Republican tax reform package for a vote in the House, on Capitol Hill in Washington, Wednesday, Nov. 8, 2017.

By Published on November 9, 2017

The tax overhaul proposed by House Republicans stands to cut tax credits for adoptions, and adoption advocates on both sides are asking why.

The Tax Cuts And Jobs Act proposed by House Republicans last week will, if passed, kill several tax credits for specific activities, the adoption credit among them, which has been available to families who may not have otherwise been able to afford adoption for the past 20 years. Adoption advocates among Republicans and Democrats blanched at the prospect of killing the adoption credit, but Rep. Kevin Brady, the adoptive father of two who spearheaded the creation of this bill, says he believes that doing away with the adoption credit in favor of the Family Credit and increased tax credits will actually help middle to lower income families better afford not only adoption, but also the long-term costs of raising children, according to CNN.

Here’s why.

The Current Adoption Credit

The adoption credit available to families in 2017 was first established in 1997, but did not become permanent until the passing of the 2012 American Taxpayer Relief Act. The credit available to families who adopt in 2017 totals to $13,570 per adopted child, and applies to international adoptions, domestic agency and private adoptions, and foster care adoptions.

However, the adoption credit comes with limits. The maximum available tax credit starts lessening when a family’s modified adjusted gross income (MAGI) rises above $203,540, and becomes completely unavailable when the MAGI reaches $243,540.

Some adoptive parents, like Denise Bierly of Pennsylvania, found the tax credit indispensable. An adoption case worker asked Bierly if she would be able to adopt a 6-year-old girl who had been in and out of foster care homes. Denise, who had already raised two sons, one of whom was adopted, said the tax credit featured heavily in her decision to adopt the girl.

“I don’t know what I would have done without the credit,” said Bierly told CNN. “It was in the calculation for me, as a middle-class person practicing law.”

Pro-life organizations and adoption advocates have praised the tax credit and urged Congress to keep it, saying that it has helped many families provide stable home lives for adopted children.

Democratic Sen. Claire McCaskill of Missouri also came out strongly against the move, allying herself with Save The Adoption Tax Credit, a national coalition of activists working to turn the tide fully against any version of the tax overhaul that removes the adoption credit.

“The notion that they’re doing away with the adoption tax credit. I mean really? On what planet is that a priority?” McCaskill said, according to USA Today.

Brady says the removal of the adoption credit is not a blow against adoption or against the pro-life cause, as the proposed bill will, according to him, actually provide more money for families.

What The GOP’s Tax Overhaul Offers Instead

Brady, chairman of the Ways and Means Committee, has adopted two children himself, but never used the adoption tax credit to do so. He claims that the tax credit, as it stands today, is ineffective in helping families who don’t face large tax bills or who don’t itemize their deductions. The proposed bill, says Brady, not only creates a new $300 credit for each parent and non-child dependent in the form of a Family Credit, but also doubles the standard tax deduction available to both individuals families. The bill would also increase the current child tax credit of $1,000 to $1,600.

“The call is this: Do we want a tax code that has special provisions that you may need once in your life, or do we want a tax code that lowers rates every year of your life?” Brady said, according to USA Today.

Brady also provided a written statement to CNN explaining how he believes the proposed tax overhaul could actually help families afford adoption even better than the current adoption tax credit.

“I’m convinced that if we give tax relief to families every year — they can use their paychecks for what matters most to them — including adopting children,” Brady wrote. “We are working to give families not only help when they’re adopting but every year when that child is growing up, by making sure they have more in their paychecks to raise kids.”

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Brady, though, said that he as a pro-life advocate and adoptive father understands peoples’ reticence to get rid of the adoption tax credit. The debate, according to Brady, is not about whether to help adoptive families or to leave them out in the cold, but it is about which manner of help would best serve adoptive families.

“This really is a debate between the old approach and a newer approach that can help more people,” Brady told The Hill. “So we’re going to have the discussion in the Ways and Means Committee, and with Republicans on do we want to stick with the old credit … or do we go with the tax cuts that provide about $2,000 dollars a year, and the new family credit that helps you with your child every year of their life?”

Vice President Mike Pence, for whom tax credits for adoption were a top priority when he served as governor of Indiana, also expressed support for the removal of the adoption tax credit in context of the tax overhaul.

“When you increase the per child tax credit, families already have a running start on real tax relief,” Pence told Fox News.

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Copyright 2017 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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  • Bryan

    This is the classic “Let’s get rid of all the special interest tax credits and deductions and simplify the tax code! Except the credit for my special interest, of course.” And so the chance for a real tax reform starts it’s slow shrivel unto death.
    I’m not trying to sound heartless. Pushing adoption should be important along with may other special interests. My brother is adopted and my wife and I are in the early stages of considering it for our family. But I’m not making the decision based on whether the federal government is going to give me a break because I’m doing something it sees as good. Using the same logic, the federal government could punish me for not doing something they see as good even if I disagree.
    I also understand that some families need the financial help to make it work. But that’s partially a matter of how you frame the situation: If they get rid of the adoption credit but increase a family credit and/or a child credit, then you could end up better off. (I know with the federal government, that’s a long shot. Generally I’m somewhat of an optimist.) And at that point it’s up to the adoption agencies to show the new calculation to their clients. It doesn’t have a nice sounding name but you’re getting something similar overall.
    If we don’t bother to think for ourselves and make rational decisions based in reason rather than pure emotion based on the rhetoric we hear everyday, we may as well let the government hand us a monthly stipend each month and use the rest of the income we earn as they see fit.

  • Chrysostomist

    I think you mean Pence was for tax credits for adoption, not abortion?

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