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Adoption Tax Credit

Below is NACAC's position statement on adoption tax credits. For information on the current federal adoption credit, go to the Post-Adoption Support section of our web site. Please note that the adoption tax credit is falt for those who adopt children with special needs and is refundable for tax years 2010 and 2011.


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.

Policy Recommendations

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.

Recent Study on Adoption Tax Credit Finds That It Too Infrequently Supports Adoptions from Foster Care

In a new report, Child Trends analyzed the recently released results of a Treaury Department study on the use of the Adoption Tax Credit and found that the credit is not fulfilling its original purpose.

To read NACAC's Fall 2007 editorial about the adoption tax credit, click here.


North American Council on Adoptable Children (NACAC)
970 Raymond Avenue, Suite 106
St. Paul, MN 55114
phone: 651-644-3036
fax: 651-644-9848