What’s Wrong With the Adoption Tax Credit?

Vote NO to the adoption tax credit

Why It’s Wrong, Exploitative and Unfair;  I Won’t Support HR 4373 and S 3616

The Adoption Tax Credit is a federal tax credit, supported by the Government and the IRS that allows adoptive parents to receive up to $12,650 ( 2012 amount) in a tax refund for adopting a child. Adoptive parents submit their qualified adoption expenses that are considered “reasonable and necessary adoption fees” such as court costs, attorney fees, traveling expenses (including amounts spent for meals and lodging while away from home), and other expenses directly related to the legal adoption of an eligible child.

While the original adoption tax credit was created to benefit the adoptions of special needs children, successful lobbying from adoptive parents and the adoption lobbyists have increased the credit by both the amount refunded and the range of adoptions covered.

The Adoption Tax Credit now covers expenses paid in an unsuccessful attempt to adopt an child before finalizing the adoption of another child can qualify for the credit. The Adoption Tax Credit now applies to domestic and international adoptions. Credit for expenses for international adoptions can be claimed only after finalization; for domestic adoptions, the credit can be applied even if the adoption does not go through.

Who the Adoption Tax Credit Helps?

Proponents of the Adoption Tax Credit claim that the credit /refund is set up to help make “adoption a financially viable option for many parents who might not otherwise have been able to afford adoption, allowing them to provide children with loving, permanent families”[1]  Yet, the modified adjusted gross income cut off for the current Adoption Tax Credit is $225,210 or more.[2]  The poor improvised adoptive parents are warned that if their modified adjusted gross income is above $185,210, then they might not be eligible for the full credit. I don’t know about you,  but $185,210 is hardly an amount that screams poverty or in need of financial assistance to me.
Costs of Adoption. If you can't afford it. Don't adopt!

 

I’m sorry, but if you can’t afford the crazy adoption fees or need to have a bake sale to afford your adoption, then DO NOT ADOPT. Or adopt through FOSTER CARE as those children REALLY NEED HOMES ( acknowledgement that CPS are also corrupt)

Who the Adoption Tax Credit Hurts?

As we know that many domestic infant adoptions are “chosen” in these times due to the financial constraints of the expectant families. Many mothers look to adoption to help them pay for their medical and living expenses while they cannot work due to pregnancy. They also look to adoption to provide financial stability for their child.  These are mothers who when asked “If you won Lotto tomorrow would you still consider placing your child for adoption?” say “NO!”.

These are mothers who are not having unwanted children, or children that are in any danger from abuse or neglect, but rather their mothers fear the doom of impending poverty and see financial assistance as induction to the stereotypical “Welfare Momma” for life.  These are mothers who would parent their children especially if they a had a guaranteed windfall of over 12,000 at the end of the tax year. The same 12K could go towards medical bills or baby supplies or just living expenses while a new mother stayed home with her child.

Getting paid to adoptApproximately 15,000 voluntary domestic infant adoption relinquishments take place in the US every year.

On the other side, the existence of the Adoption Tax Credit does provide additional  incentives that allow a family to pursue adoption. By making “adoption more affordable” to people who make over 100K a year anyway, we are increasing the demand of adoptable children in the US and providing more incentives for the adoption agencies to identify at risk families that they can separate from their children for their own profits.

Let us remember that the adoption industry is over a 5.8 billion dollar annual industry. Historically, as the adoption tax credit went up, so does the adoption fees. In other words, the US government subsidizes the adoption industry this way through the Adoption Tax Credit.

In addition, by giving added incentives for adoptive parents to spend more money on adoption, they will look towards international or domestic adoptions more. This will actually HURT the children that MIGHT benefit most from being adopted, the children living in foster care. Of course, foster adoptions often are the lowest cost and with other subsidies, often practically free. So don’t go telling me that  we “need the Adoption Tax Credits to help all the unwanted children”. It hurts them.

The Fiscal Impact of the Adoption Tax Credit

 

While families adopting children who do not qualify as special needs are typically eligible to get a refund for their adoption expenses, families adopting kids who do qualify can get the entire $13,360 refund no matter how much they paid to adopt a child — even if they had no expenses. In other words, they got PAID to adopt. For example:

  • Deborah Schwinger, from Hamburg, Pa. received a $24,300 refund from the Adoption Tax Credit last year thanks to the adoption tax credit. In 2009, she adopted two children and went shopping . “The kids got new bikes from Walmart and I got a grill, I set up [bank] accounts for the children, I’m working to get us a bigger house, I no longer live paycheck-to-paycheck and have little debt. We have everything we need and we get a few things we want.”
  • The Wards, a family of 12 from North Carolina, received a $54,000 refund from the Adoption Tax Credit last year.

Nearly 100,000 returns claiming adoption tax credits were received in 2011.

In all, $1.2 billion in Adoption Tax Credits were claimed in 2011.[3] If a 12,000 Motherhood Tax Credit was given to women to use instead of placing their child to adoption, that would only cost 180 million. That would be an additional 1,020,000,000 saved in unpaid tax credits. I would dare say, that given other income limitations, we could tax the same moneys slated for the Adoption Tax Credit and offer it to other low income mothers as well or just reduce the National Deficit by a million dollars in one fell swoop.

The History of the Adoption Tax Credit

The credit has been around since 1997, but up until the 2010 tax year, it was always a non-refundable credit — meaning it would offset any taxes owed, and anything that remained was carried over to the next tax year.

  • 2012      Adoption Tax Credit Amount $12,650
  • 2011       Adoption Tax Credit Amount  $13,360
  • 2010       Adoption Tax Credit Amount  $13,170
  • 2009       Adoption Tax Credit Amount  $12,150
  • 2008       Adoption Tax Credit Amount  $11,650
  • 2007       Adoption Tax Credit Amount  $11,390
  • 2006       Adoption Tax Credit Amount  $10,960
  • 2005       Adoption Tax Credit Amount  $10,630
  • 2004       Adoption Tax Credit Amount  $10,390
  • 2003       Adoption Tax Credit Amount  $10,160[4]

President Obama’s Affordable Care Act of 2010 made the credit refundable so the money would go directly into the taxpayer’s pocket rather than being applied to future taxes owed.

In 2011 Adoptive Parents claimed up to $13,360 for each child they have adopted in the past six years on their 2011 tax returns this year — an increase of $190 from the year before, and the amount that they are pushing for now to be permanent.

What You Can Do About the Unfair Adoption Tax Credit

There is now a Senate companion bill (S.3616 ) to H.R. 4373 that is in the House. These bills would make the Adoption Tax Credit permanent and refundable.  Many adoptive parents groups and adoption agencies are asking for letters of support and calls, emails sent to  Representatives and Senators to support the Adoption Tax Credit Bills.

It’s “push BACK time” people. Please ask your Senators and Representative understand that HR 4373 and S 3616 are exploitative and used to SEPARATE FAMILIES by ADOPTION. They need to  understand that giving tax payer money to adoptive families rather than assistance to mothers is unethical and wrong. 

If the proposed Adoption Tax Credit Bills do NOT get passed, then ONLY Special Needs Adoptions will be eligible. I have NO issue with that!

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About the Author

Claudia Corrigan DArcy
Claudia Corrigan D’Arcy has been online and involved in the adoption community since early in 2001. Blogging since 2005, her website Musings of the Lame has become a much needed road map for many mothers who relinquished, adoptees who long to be heard, and adoptive parents who seek understanding. She is also an activist and avid supporter of Adoptee Rights and fights for nationwide birth certificate access for all adoptees with the Adoptee Rights Coalition. Besides here on Musings of the Lame, her writings on adoption issue have been published in The New York Times, BlogHer, Divine Caroline, Adoption Today Magazine, Adoption Constellation Magazine, Adopt-a-tude.com, Lost Mothers, Grown in my Heart, Adoption Voice Magazine, and many others. She has been interviewed by Dan Rather, Montel Williams and appeared on Huffington Post regarding adoption as well as presented at various adoption conferences, other radio and print interviews over the years. She resides in New York’s Hudson Valley with her husband, Rye, children, and various pets.

32 Comments on "What’s Wrong With the Adoption Tax Credit?"

  1. This comment has been removed by a blog administrator.

  2. 100% AGREED! I am writing Claire McCaskill and Roy Blunt in addition to my state Representatives. Thanks for the links! I am liking this on my blog as well.

  3. I wrote my representative about H.R. 4373. I can’t find any information about the Senate companion bill though. Do you have any links?

    Also, I wrote my representative using popvox.com. So far they have had 108 comments on the bill, 95% in favor. 🙁

  4. Here is the thing about special needs adoptions…just about every child adopted from foster care is classed as special needs whether they are in reality or not. That is what the foster parents in our case are claiming right now…that my husband’s daughter is special needs. What qualifies her? She used to be failure to thrive and requires snacks through the day! Other than that she’s fine. I don’t doubt that they are using this credit to fund their legal fight against us. If for some reason I was to adopt my step-daughter, we wouldn’t qualify for the credit and we certainly don’t qualify for the credit to fight the foster parents from adoption!

    • That’s a really good point, Samantha. It’s just gross that there is abuse of the system and corruption on so many levels. I often wonder how the hell people sleep at night. How do the rationalize this to themselves.. or even more.. to the kids?

  5. While foster kids continue to languish in the foster care system, the majority of adoptions in this country are through private domestic infant adoption and international adoption and that this bill makes it easier and more affordable for perspective adoptive parents to continue to ignore US foster kids and exercise their preference of more desirable manufactured domestic infants and exotic international adoptions, this bill will actually HURT foster kids!

    • Such an important point to make to Congress! They just don;t understand adoption.. stuck in the “warm and fuzzy” pattern that ANY pro-adoption bill is good. Thanks Sunday!

    • Sunday, I agree and not because I adopted from the foster system but because before we fund adoption from foriegn countries we need to take care of our children in the system that have been abused and thrown away.

  6. GREATGREATGREAT Post, Claud. Thanks for doing the homework.

  7. I got an incredibly annoying response from my senator, Dick Durbin. His email thanked me for supporting the adoption tax credit and said that it is incredibly important to promote adoption. GRRRR!

    I know these things are just form letters but it’s frustrating nonetheless.

  8. While I agree with the fact that the money should only be given for special needs adoptions through our foster care system. I agree that people who are adopting babies or foreign kids should not qualify. I do NOT agree that we should hand out money to women in poverty who would keep their baby if they got $12,000 afterward… Planned parenthood. Its free. If you cant figure out how NOT to get pregnant I’m not sure $12,000 is going to help. Brash comment maybe but the truth as I see it. No I am not rich. Yes I have adopted from the foster system. I guess we all see out of our own rose colored glasses.

    • You obviously know nothing, you would rather see families be ripped apart
      then spare one damne dollar! You’re are disgusting and full of entitlement! I feel sorry for you’re children, being ripped from their heritage. And you wanting to do nothing, to make sure other children don’t suffer the same fate. You are the last person, who should be having children. And your adopted children should be taken from you and all your parental rights should be terminated, immediately! Countries like Norway, Sweden and Finland, give out more money than any other country in the world, so all women keep their babies. Domestic adoption is pretty much almost non-existent over there, because of that. And yet they still have the top 3 best economies in the world.

      We need to start having mandatory I.Q test before people can be aloud to vote, to make sure people like you never vote.

    • I’m thinking IQ tests should be mandatory before people can have sex. Really not hard to figure out how not to get pregnant Moonstar. As far as heritage, poverty, molestation,rape,poor diet,hygiene and education are the heritage my adoptive children came with. I think they will do better being taken out of that heritage. Trust me. I am not an infertile woman who could not have children looking to steal someones baby.I am person who saw a need and children with problems that no one wanted. My parental rights are intact with all of my children. I’m not sure all the women on this site can say the same.

    • Foster care adoption and infant adoption, are two entirely separate things. You shouldn’t even compare the two. Like the way you’re attacking these woman and comparing them to parents who are abusive.

      “Really not hard to figure out how not to get pregnant Moonstar.”
      Tell that to some of the teenagers who know nothing about sex, because their parents are to blinded by religion to educate them about it. And keep blocking legislation, to bring sex ed in the schools. It’s already done been proven that teen pregnancy, is more common in states where religion is the strongest. And teen pregnancy is the lowest in states that have more sex ed, were religion is not so strong.

      http://abcnews.go.com/Health/Sex/study-finds-teen-pregnancy-common-religious-states/story?id=8602283

      Europe and Australia has more sex education and less religious fanatics. And they have the lowest teen pregnancy rates in the world.

      http://en.wikipedia.org/wiki/Global_incidence_of_teenage_pregnancy

      Europe also has lower abortion rates.

      http://www.religioustolerance.org/pregadol.htm

      “As far as heritage, poverty, molestation,rape,poor diet,hygiene and education are the heritage my adoptive children came with. ”
      No matter what you think or say, your ancestors will never be their ancestors. This is why if you look at England, you will see that an adopted child, will never be King or Queen. If Prince William and Kate can not conceive their own biological child, then Prince Harry will have to take over the throne.

      “I’m thinking IQ tests should be mandatory before people can have sex.”

      Impoverished people and young people, have been having sex since the beginning of time and they always will no matter what. This is why all this abstinence only education needs to stop.

    • Families are ripped apart from the negligence of the bio parents not taking the interest or intiative to care for their children. Most of them are selfish self centered morons. they don’t have the stamina to get off their butts and do what needs to be done to keep their children from being raped by boyfriends or relatives. So don’t dare put down someone because of their veiws.

  9. Enlightening post, I had no idea there was a credit! Shows how much I need to educate myself…Can I repost this on facebook or is that a no-no?

  10. Obviously you and those you know do not have issues having children of your own or you would not be so adamantly opposed. Have you heard of karma? Maybe being cursed with childlessness or, if you already have children, suffering the loss of those children will cause you to be a little more compassionate. My wife and I cannot have children of our own and we are hardly rich (<40000/year). We were able to adopt and the total cost was around $35000 ($20,000 for the adoption fee and the rest for legal fees, travel and lodging to the state where the adoption took place (by the way it is required legally to travel to and stay in that state until both states have approved the adoption), social service visits, etc.) This tax credit allows us and others like us to be able to adopt. By the way rich people are less likely to adopt than to just do IVF, so by not supporting this bill you are just keeping the poorer among us that can't have children from being able to ever have a family. As it is now for us we will have to wait another 10 years before we will be able to afford to give our son a brother or sister. Please reconsider your position on this issue.

  11. I would say the one very obvious thing is that by reading you would see that this following statement is both ignorant and insulting here:

    “Obviously you and those you know do not have issues having children of your own or you would not be so adamantly opposed. Have you heard of karma? Maybe being cursed with childlessness or, if you already have children, suffering the loss of those children will cause you to be a little more compassionate”

    “Suffering the Loss of those children?” We already did. We DID loss them.. to ADOPTION. Hence, why you will not find compassion here extended to a means that allows the adoption industry to continue separating mothers and children. I’m sorry, but I really have no care for you personal desire to have another’s person child. Adapt to reality.. you can’t have kids, you can’t afford to adopt. Why should the government help you do something I don’t support with my tax dollars?

  12. How did you “lose” your children to adoption? Unless you’re deemed grossly unfit by the DCS or imprisoned, no one is going to take your child. I’m not sure where you’re getting this idea from. Please name someone – anyone – who has been pressured by the “adoption lobby” to give up their child that they want to keep.

    This entire article is full of half-truths and complete fabrications.

    “They also look to adoption to provide financial stability for their child. These are mothers who when asked “If you won Lotto tomorrow would you still consider placing your child for adoption?” say “NO!”. “

    And if I won the lottery I’d spend it all on hookers and blackjack. But we have to live in reality. Positing hypothetical scenarios does nothing to deal with the matter at hand.

    “These are mothers who are not having unwanted children, or children that are in any danger from abuse or neglect, but rather their mothers fear the doom of impending poverty and see financial assistance as induction to the stereotypical “Welfare Momma” for life. These are mothers who would parent their children especially if they a had a guaranteed windfall of over 12,000 at the end of the tax year. The same 12K could go towards medical bills or baby supplies or just living expenses while a new mother stayed home with her child. “

    How does an additional $12K in the bio-mother’s pocket not make her a “welfare momma” (who already get a lot off government support as it is)? She would still be feeding off the government teat, right? And $12K will not last very long in the grand scheme of things, even if it is handled well. If she’s already in such a precarious financial position upon getting pregnant, the odds of her having the wisdom to use that money wisely is slim to none.

    “Deborah Schwinger, from Hamburg, Pa. received a $24,300 refund from the Adoption Tax Credit last year thanks to the adoption tax credit. In 2009, she adopted two children and went shopping . “The kids got new bikes from Walmart and I got a grill, I set up [bank] accounts for the children, I’m working to get us a bigger house, I no longer live paycheck-to-paycheck and have little debt. We have everything we need and we get a few things we want.”

    The Wards, a family of 12 from North Carolina, received a $54,000 refund from the Adoption Tax Credit last year.””

    Provide a source or STFU.

  13. I just can not NOT say this…

    Anon you commented, “How does an additional $12K in the bio-mother’s pocket not make her a “welfare momma” (who already get a lot off government support as it is)? She would still be feeding off the government teat, right? And $12K will not last very long in the grand scheme of things, even if it is handled well. If she’s already in such a precarious financial position upon getting pregnant, the odds of her having the wisdom to use that money wisely is slim to none.”

    So let me get this straight, if I were to get $12,000 from our government to support keeping my own baby that would be welfare which definitely carries a negative stigma. BUT if adopters are given a $12,000 tax credit to adopt and raise that baby it is not welfare? Where is the distinction made and why?

    If adopters NEED the $12,000 to adopt someone else’s baby that certainly seems like welfare to me.

    Of course, $12,000 would not seem like a lot of money to someone who can afford to adopt. To someone like me, at the time, it would have meant everything. It would have meant at least a year’s worth of rent or a college tuition so that I could continue my education. It could have meant many weeks of child care for my son so that I could attend school. No, it probably “would not last long in the grand scheme of things” but neither would my “precarious financial situation” at the time of my son’s adoption.

    It may surprise you, Anon, to learn that although I was in a precarious financial situation when my adoption took place I am no longer in that place. This is not because I did not raise my oldest son, it is in spite of the fact that I did not raise him. If I had kept him, I probably would have gotten my life together much sooner and not wallow in self-hate and guilt for giving him away to strangers.

  14. Claudia, I hope it’s okay, I wrote a short blog post about this issue and linked to you here and your NY times piece. Not that I have many readers ha ha!
    http://firstmomout.wordpress.com/2012/11/05/the-adoption-tax-credit-2-thumbs-way-down/

  15. I agree with a lot of what you’ve written here. We adopted a special needs child in 2012 and believe me, she has special needs! To hear that CPS agencies are doctoring or tailoring documentation to state that a child has special needs when they don’t makes me feel sick. Our child was horrifically abused by her biological parents. Her father is doing 5 years of hard time for what he did prior to her 12th week of life. She then entered the foster care system on the opposite side of the country because her mother thought that taking her to another state would keep her out of the system. Well, that was viewed as a failure to act in her child’s best interest. She had burns over large portions of her little body, every limb and multiple ribs were broken and she had ligature burns around her neck. She was then permanently taken from her mother because she never lived up to the minimum requirements of CPS, which were to get a job or find an apartment. She just flopped at anyone’s house getting stoned and partying while her daughter went into foster care. The foster family that raised her child for the next 3 years was no better than if she had just stayed with her mother. They physically, emotionally and sexually abused her until she was finally removed from them. Once she got to us, she needed serious rehabilitation and likely will need counseling for the rest of her life as well as plastic surgery. We became foster parents to help children in situations like hers, not for some $12 grand tax credit! She was failed by her biological family and failed by her first foster family. She clearly fits the definition of a special needs child. To think that CPS workers would label perfectly fine children as such just to give someone else a hand out should cause us all to question our government and it’s employees. What are their true intentions? Giving this credit to anyone and everyone essentially denies that our child is truly a special needs child. For the record, they can keep their $12 grand and use it to rehab bad parents, clean house of the money grubbing foster families and hire some better CPS workers! I’m disgusted!!!

  16. This is such an emotional issue on so many different levels. I think first thing is that we need to understand the perspective each party is coming from. First is Claudia who if you take the time to read her story you understand where she is coming from. If we had gone through what she did I’m sure each of us would have the emotions that she does. Second we have infertile people who because of society’s lack of understanding of infertility has created a culture of some people doing anything to get a baby and lessening the meaning of being a parent. If we as a society can change that perception I think you would have fewer people adopting and more people living Childfree.

    Before I explain my view on this topic so like what I described above I can help you understand where I coming from and how it impacts my view. I am a 32 year old infertile man who is considering domestic adoption to build a family with my wife. I do not feel I am entitled to a child but becoming a parent is something a have a strong desire for. If I am not able to become a parent I would likely invest my time in some sort of children’s charity that didn’t come with the high risk of loss that Foster Parenting does to fill that void in my life. If my wife and I pursue Private Adoption, I hope but do not expect us to be handed a child. I hope it would be because those expectant/birth/first parents felt we would provide the child the life they for whatever reason at the time were unable to provide the child. We are not rich but can still afford private adoption. So that is my story.

    As far as the tax credit, yes I think there needs to be reform on multiple levels. I do think they need to get rid of the tax credit. But at the same time they need to regulate the costs of private adoption and the profits of a so called “non-profit” business. There is no need for the government to subsidize a non profit industry. If the government did that then we wouldn’t have the issue of those who choose domestic adoption to build their family (as opposed to other infertility solutions) who couldn’t afford it otherwise needing a tax credit.

    On the other hand I don’t think the government should subsidize those young women who are not in a position (from a financial standpoint) the ability to raise their child. If anything that might encourage more unplanned pregnancies that young women will know the government can just bail them out. What I think we should invest in is more sex education. And by that I mean preventing pregnancies from being unplanned. Which goes beyond just “abstinence only” programs, something the far right wing continues to ignore. This will help reduce the unplanned pregnancies that result in producing wanted (because wanting is not the issue) children who for financial or lack of support reasons aren’t able to be raised by their biological parents.

    The other point I disagree on is that if private domestic adoption didn’t exist infertiles would be more likely to become Foster Parents. If what being a Foster Parent and being an Adoptive Parent were the same thing I would agree. But they aren’t, in fact outside of the lack of biological connection they are completely different. Foster Parenting is for the most part providing a temporary home for a child that does not have a safe home. Yes, there are cases where it becomes permanent but those situations are not as common. A Foster Parent is likely going to experience loss. It is not something someone is going to do if they want a family. Yes, there are cases when it does but again it’s not as common. Foster parenting is not for everyone. It takes a different type of mentality to do so. Those who choose to become a Foster Parent because of the cost of Private Adoption are doing it for the wrong reasons and are likely not good candidates to become Foster Parents, IMO. And I apologize if that offends any Foster Parents who choose it because of cost.

    On the other hand someone who becomes an Adoptive Parent does so to build a family. No, they aren’t providing an “unwanted” child with a home. They are providing a child whose birth/first parent for whatever reason felt they were unable to raise that child at that time. Let me be clear private adoption is not easy beyond the cost. There is a high level emotion from all angles. The first/birth parents experience loss, the adoptee experiences loss as well and the adoptive parents experience emotions of their own mostly through the child.

    The problem with this whole situation is the private adoption lobby. Because of the corruption with them nothing will ever change unless another lobby is able to match the money they have or a grass roots campaign is able to impact votes enough to get lawmakers in there that will make a change. Writing letters to your representatives unfortunately does nothing. Having interned for a Congressman, the sad truth is all those letters do is produce a genetic letter response. This isn’t just the case for this but every other issue in this country. Until Campaign Finance is truly addressed, I don’t expect much to change in this country.

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