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Warner Cosponsors Legislation to Make Adoption Tax Credit Fully Refundable

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

“Every child deserves a loving and supported home,” said Senator Warner. “This legislation will allow more families to claim the Adoption Tax Credit and pave the way for more children to be adopted into safe, stable and caring homes.”

The adoption tax credit was made permanent in the American Taxpayer Relief Act in January 2013. However, this act did not extend the refund provisions that applied to the adoption tax credit in 2010 and 2011 . Adoption Tax Credit Refund Act restore the reimbursable portion of this essential support for families wishing to adopt.

According to the data, Virginia ranks near the bottom of the 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 country as a whole. This bill aims to help families who want to adopt by removing some of the financial constraints that families considering adopting face.

Data indicates that a refundable tax credit for adoption plays an important role in the ability of low-income families to adopt and support a foster child. According to the Department of Health and Human Services, one-third of all adopted children live in families whose annual household income is at or below 200% of the poverty level. Despite the common misperception that only wealthy families adopt, nearly 46% of families adopting foster families are at or below 200% of the federal poverty level. The tax burden for many of these families is so low that they cannot benefit from the adoption tax credit at all unless it is refundable.

The full text of the bill is available here.


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