I

104TH CONGRESS

1ST SESSION H. R. 1819

To amend the Internal Revenue Code of 1986 to allow individuals a refundable credit for adoptions expenses with a larger credit for the adoption

of a foster child.

IN THE HOUSE OF REPRESENTATIVES

JUNE 13, 1995

Mr. BARRETT of Wisconsin introduced the following bill; which was referred

to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to allow individuals a refundable credit for adoptions expenses with

a larger credit for the adoption of a foster child.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. REFUNDABLE CREDIT FOR ADOPTION EX4 PENSES.

5 (a) IN GENERAL.—Subpart C of part IV of sub6 chapter A of chapter 1 of the Internal Revenue Code of

7 1986 (relating to refundable credits) is amended by redes8 ignating section 35 as section 36 and by inserting after

9 section 34 the following new section:
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1 ‘‘SEC. 35. ADOPTION EXPENSES.

2 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in3 dividual, there shall be allowed as a credit against the tax

4 imposed by this subtitle for the taxable year the amount

5 of the qualified adoption expenses paid or incurred by the

6 taxpayer during such taxable year.

7 ‘‘(b) LIMITATIONS.—

8 ‘‘(1) DOLLAR LIMITATION.—The aggregate

9 amount of qualified adoption expenses which may be

10 taken into account under subsection (a) with respect

11 to the adoption of a child shall not exceed $5,000

12 ($6,250 with respect to the adoption of a foster

13 child).

14 ‘‘(2) INCOME LIMITATION.—The amount allow15 able as a credit under subsection (a) for any taxable

16 year shall be reduced (but not below zero) by an

17 amount which bears the same ratio to the amount

18 so allowable (determined without regard to this

19 paragraph but with regard to paragraph (1)) as—

20 ‘‘(A) the amount (if any) by which the tax21 payer’s adjusted gross income exceeds $60,000,

22 bears to

23 ‘‘(B) $40,000.

24 ‘‘(3) DENIAL OF DOUBLE BENEFIT.—

25 ‘‘(A) IN GENERAL.—No credit shall be al26 lowed under subsection (a) for any expense for
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1 which a deduction or credit is allowable under

2 any other provision of this chapter.

3 ‘‘(B) GRANTS.—No credit shall be allowed

4 under subsection (a) for any expense to the ex5 tent that funds for such expense are received

6 under any Federal, State, or local program.

7 ‘‘(c) QUALIFIED ADOPTION EXPENSES.—For pur8 poses of this section, the term ‘qualified adoption ex9 penses’ means reasonable and necessary adoption fees,

10 court costs, attorney fees, and other expenses which are

11 directly related to the legal adoption of a child by the tax12 payer and which are not incurred in violation of State or

13 Federal law or in carrying out any surrogate parenting

14 arrangement. The term ‘qualified adoption expenses’ shall

15 not include any expenses in connection with the adoption

16 by an individual of a child who is the child of such individ17 ual’s spouse.

18 ‘‘(d) MARRIED COUPLES MUST FILE JOINT RE19 TURNS.—Rules similar to the rules of paragraphs (2), (3),

20 and (4) of section 21(e) shall apply for purposes of this

21 section.’’

22 (b) CONFORMING AMENDMENTS.—

23 (1) Paragraph (2) of section 1324(b) of title

24 31, United States Code, is amended by inserting be25 fore the period ‘‘, or from section 35 of such Code’’.
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1 (2) The table of sections for subpart C of part

2 IV of subchapter A of chapter 1 of such Code is

3 amended by striking the last item and inserting the

4 following:

‘‘Sec. 35. Adoption expenses.

‘‘Sec. 36. Overpayments of tax.’’.

5 (c) EFFECTIVE DATE.—The amendments made by

6 this section shall apply to taxable years beginning after

7 December 31, 1995.

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