As the continued existence of the Federal Adoption Tax Credit comes into doubt during Congress’ upcoming tax reform legislative sessions, many adoptive families and adoption professionals are worried — and rightly so. Adoption tax credits are a huge factor in making the adoption process more affordable for families across the United States, creating more prospective homes for waiting children.
But, while you may be aware of and support the federal adoption tax credit, you may not know about a smaller, more local resource available to you — your state adoption tax credit or refund. Like the federal tax credit, your state adoption tax credit deserves your attention and support, too.
But, first, it’s important to understand exactly which states offer adoption tax credits. Here’s a list of them:
- Alabama: $1,000 per child for a private intrastate adoption or adoption of a qualified foster child
- Arkansas: 20 percent of the federal adoption tax credit
- California: $2,500 tax credit
- Georgia: $2,000 per child for children who were adopted from state foster care
- Indiana: $1,000 tax credit
- Iowa: $2,500 tax credit
- Kansas: Up to 75 percent of your federal adoption tax credit
- Michigan: $1,200 refundable tax credit
- Mississippi: $2,500 tax credit
- Missouri: Up to $10,000 tax credit
- Montana: $1,000 tax credit
- Ohio: Up to $10,000 tax credit
- Oklahoma: Up to $20,000 tax credit
- South Carolina: $2,000 tax credit
- Utah: $1,000 tax credit
- West Virginia: $4,000 tax credit
- Wisconsin: $5,000 tax deduction
Unfortunately, as you can see, not all states offer additional tax credits or deductions for families who adopt. Some states, like Wisconsin, are actively undergoing legislative discussions to update their tax codes — but not all support the existence of adoption tax credits. Those legislators who are unaffected by adoption may not understand the whole aspect of the adoption tax credit — which is why it’s so important for you to let your local representative hear your voice!
Whether or not your state is actively debating your adoption tax credit or deduction, it’s always a good idea to show your representatives your support at any time. When you make clear how much your current adoption tax credit means to you (or how much your state should implement one), it emphasizes to your representative the importance of this resource — and will let them know what their constituents value in case the adoption tax credit is ever brought to the table for discussion.
You can contact an adoption attorney for more information on the state adoption tax credit and any upcoming legislation here.