NACAC believes that federal, state, and provincial governments bear a responsibility to children and youth who leave foster care to join a permanent family. These children and youth often have lifelong special needs and disabilities that can create a financial burden on their families for years to come. Therefore, tax policy should focus on supporting the transition of children and youth from foster care to permanent families, including adoptive families, customary adoptive families under tribal law, and permanent legal guardians.
To encourage permanency for foster children and youth and support families raising children and youth with special needs, NACAC supports flat, refundable tax credits for families who adopt or take permanent legal guardianship of foster children and youth. Flat tax credits would reflect the reality that these families may not have significant adoption expenses in the process of legalizing their family arrangements, but are likely to have higher expenses over time as they raise children and youth with special needs. Refundable credits will make the tax benefit available to the many families who permanently care for former foster children and youth but do not have a tax liability.