S.1458 - Adoption Tax Credit Refundability Act of 2025 (119th Congress)
Summary
S.1458, the Adoption Tax Credit Refundability Act of 2025, aims to amend the Internal Revenue Code of 1986 to make the adoption tax credit refundable. This bill redesignates section 23 as section 36C and moves it to subpart C, making the credit refundable. The bill also includes conforming amendments to other sections of the Internal Revenue Code and related acts.
Expected Effects
The primary effect of this bill is to allow lower-income families to fully benefit from the adoption tax credit, even if they have little or no tax liability. This change would provide direct financial assistance to families incurring adoption expenses. It also mandates the creation of a standardized third-party affidavit to verify legal adoptions.
Potential Benefits
- Increased financial assistance for families adopting children, especially those with lower incomes.
- Simplification of the adoption tax credit process through standardized third-party affidavits.
- Greater equity in the tax system by allowing more families to fully utilize the adoption tax credit.
- Potential increase in the number of adoptions due to reduced financial burden.
- Provides a transitional rule to treat carryforward as refundable credit.
Most Benefited Areas:
Potential Disadvantages
- Potential for increased government spending due to the refundable nature of the credit.
- Possible administrative burden in implementing and managing the refundable credit and standardized affidavits.
- Risk of fraudulent claims, requiring robust verification processes.
- Complexity added to the tax code, despite simplification efforts in some areas.
- May not significantly impact higher-income families already able to fully utilize the existing credit.
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution, as it aims to support families and children through the tax system. Specifically, the preamble states the Constitution is intended to "promote the general Welfare". Article I, Section 8 grants Congress the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).