Adoption tax credit: What the GOP tax bill means to parents and kids

The Stewart boys, Sam, 11, and Jack, 9, became part of a family after the adoption tax credit helped make it financially possible for their parents.

Story highlights

  • The GOP tax bill suggests cutting the 20-year-old adoption tax credit
  • Adoption advocates say children in need of families stand to lose

(CNN)Denise Bierly was looking forward to the next phase of her life. At 52, and with two grown sons, the single mother's mind was turning to travel, book clubs and saving for retirement.

Then she got the phone call.
    A 6-year-old girl needed a permanent home, the adoption case worker said. Already the child had bounced between 10 foster homes after being removed from her original home because of abuse. She deserved a better life and a strong parent, and Bierly -- who later fell for the child -- was the sort who could give her both.
    She's been steeped in the adoption world for 27 years. Her oldest son is adopted, and she's a family attorney who also serves as director of adoption for the Academy of Adoption and Assisted Reproduction Attorneys. She understood what was at stake.
    She began thinking about what a young child would mean for her finances. Facing an unexpected new round of summer camps, school expenses, extracurricular activities and future college tuition bills, she took comfort knowing she would qualify for the full amount of the one-time adoption tax credit, or $13,570 per child.
    "I don't know what I would have done without the credit," said Bierly, of State College, Pennsylvania. "It was in the calculation for me, as a middle-class person practicing law," and it shaped her decision to meet with the adoption team.
    Bierly will finalize the adoption of her first daughter on December 22. If the new GOP tax bill goes into effect as it reads right now, she may be getting that needed credit just under the wire.

    Defining 'pro-family'

    House Republicans unveiled a 429-page tax overhaul last week, and among the proposals in the "Tax Cuts and Jobs Act" is getting rid of the adoption tax credit which has been on the books for 20 years.
    This means, if this bill were to pass this year as is, families that finalize adoptions starting in 2018 wouldn't have access to the credit.
    The amount of the credit, as it stands right now, starts to phase out when families have an adjusted gross income above $203,540 and is off limits once that income exceeds $243,540. Adoption advocates say the credit exists for families who may not be able to afford adoption otherwise.
    The main architect behind the new tax bill, Rep. Kevin Brady, is the father of two adopted children himself. But the chairman of the Ways and Means Committee never used the adoption tax credit, a committee spokeswoman confirmed.
    Brady, a Republican from Texas, argues that the tax credit leaves families behind, especially those that don't itemize or face big tax bills. Instead, he and other bill proponents point to how the reform would nearly double the standard deduction individuals and families can take. It also creates the Family Credit, which includes a new $300 credit for each for parent and non-child dependents, and expands the child tax credit from the current $1,000 to $1,600.
    "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," he said in a written statement to CNN. "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."
    Bierly and others in her network say the loss of the credit will mean lost adoptions. In 2015, nearly 64,000 families used the credit to some degree. And for a bill that touts itself as being "pro-family," they believe the proposed cut amounts to hypocrisy.
    "There are children who have no families. What's more important than that?" said Mary Boo, executive director of the North American Council on Adoptable Children. "We've talked to thousands of families who could not have adopted without that credit. We know it's important."
    The cost for adoptions vary, but each year Adoptive Families, a magazine and online resource, conducts a survey to take the pulse of what people are spending. The latest survey, looking at adoptions finalized in 2015 and 2016, showed domestic newborn adoptions cost an average of $37,000 and international adoptions averaged about $42,000. Adoptions from the U.S. foster care system cost little in comparison, on average about $2,600, assuming there are no complications. And that doesn't mean parents won't incur plenty of expenses, especially when the children have special needs -- including, for example, those born with addictions.
    "Financial incentives do make a difference in people's decisions on whether to adopt," said Adam Pertman, president and founder of the National Center on Adoption and Permanency. "Not that they do it for the money, but it's expensive and it makes a difference and helps people get to yes."

    Bigger than politics

    When talk of repealing the credit started percolating, a coalition of activists geared up to respond. They launched a movement -- "Save the Adoption Tax Credit" -- hoping to stamp out any further discussions.
    One of the people involved in this working group is Michaela Sims, a Washington, D.C., lobbyist and former senate staffer. She's known her way around Capitol Hill for 20 years and isn't easily rattled.
    "Nothing fazes me anymore, and I've been specifically preparing for this [proposed cut] for over a year," said Sims, 47. "But when I saw it in black and white, it took my breath way."
    Michaela Sims Stewart, who goes by her maiden name professionally, thanks the adoption tax credit for allowing her and her husband Jon to bring Sam, left, and Jack into their family.