Maybe dumb questions about the tax credit

jillianmb · October 2012

Let me preface this by saying I'm Canadian, but an American resident. I only understood the basics of my own political system (just b/c it bored me and I didn't try to understand it like I should have) and I am not much better at understanding the American system since moving here. I know it is terrible and I should really have a better understanding, but I don't.

So this tax credit- who decides whether it stays or goes? I know it is federal, so does that mean we won't know the future of the credit until after this next election, or will the decision be made before then? Does one candidate support it more than the other (not that I can vote anyway! But DH can)? Is there a good site that details this info etc.?

lafayettegirl · October 2012

Congress determines whether it stays or goes. The federal tax credit will automatically end at the end of this year because it was written to "sunset" or end. Members of the U.S. House of Representatives and U.S. Senate have to draft and pass legislation to either extend the credit into another year or make it permanent. Right now, there is legislation pending in both the House and Senate to extend the credit, but neither house has voted on those bills yet.(H.R. 184, H.R. 4373, S. 82, and S. 3616 - all can be found by visiting www.lis.gov)

The current session of Congress does not end until the end of the year, but all members are back in their home districts/states until November 13. This means neither body can vote until they return. Once they return, they are scheduled to vote on bills the week of November 13, then again from November 26th until they recess for the Christmas and New Years holidays and/or the end of the year.

The tax credit is one that does not have a lot of opposition, but it also isn't considered a "priority" like some of the bigger bills Congress has to tackle. My best guess is that one of the bills extending the credit will be combined into a bigger piece of legislation that the House and Senate will vote on before the end of the year.

However, if it is not, and Congress does not vote on it at all, the credit will expire completely at the end of the year. Once Members are sworn in next year, they can draft new legislation on this issue - either creating a new tax credit or retroactively extending the one that ended (very rarely happens).

The best way you can influence Congress's movement is to contact your Representative and Senator. If you are unsure of who those folks are, visit www.house.gov or www.senate.gov. Most Members have a way to contact them via their website, but you can also call or send snail mail.

(If you need more specific info, let me know. I work for a Member.)

IRR · October 2012

PP certainly knows a lot more about this from me, so correct me if I am wrong. Jillian, since you are adopting this year, you will still be eligible for the tax credit. Things changed this year where it is a credit and NOT a check back like some other posters have indicated they have received in the past. I wrote both my senator and congressman who both responded positively that they would support the bill when it comes up for a re-vote (extension), but who knows if things will change with the election depending on who wins. Even though my adoption should be completed this year as well, I still wrote in because it will affect everyone trying to adopt in 2013 and beyond. I believe if they keep the credit format they will pass this again since it is not quite the same as "writing checks" when it is a credit and it is still capped at $13K. They are proposing just allowing credits for people who adopt special needs children going forward. Time will tell.

Dr.Loretta · October 2012

The legislature decides.

A bill was introduced, but they decided to put off voting on it until after the election.

I haven't heard either candidate breathe a word about it.

On FB there's a Save the Adoption Tax Credit page, and it has a lot of info, including who's sponsoring it, the status, etc.

jillianmb · October 2012

Thanks ladies this is really helpful. I know we will still be eligible since our adoption will be completed just before the end of the year (phew!), but I really hope the credit is reinstated for friends and for ourselves if we adopt again.

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