From the Terre Haute Tribune Star:
In a world, and state, in which thousands of parent-abandoned children cry out for family nurturing and upbringing, an idea Gov. Mike Pence has proposed merits a close look by the Indiana General Assembly as it meets in 2014.
Pence wants Indiana to establish a tax credit to offset a family’s adoption expenses, which, it seems, can run as high as $50,000.
This Indiana credit would augment a federal Internal Revenue Service tax credit of $12,970. That credit can cover, according to the IRS, “qualified” expenses that would include such things as adoption fees (for example, one agency in Fort Wayne charges a $12,000 fee), court and attorney fees, travel expenses and some other expenses directly related to legal adoption.
Under IRS regulations, that is a dollar-for-dollar cut of federal taxes owed, which is better than a deduction that reduces taxable income.
In 30 years, that tax credit has risen from $1,500 (in 1981) to a high of $13,360 (in 2011), and in the beginning, it applied to special needs adoptions only. For two recent years, 2010 and 2011, the credit was, in fact, refundable to the federal taxpayer. It has now returned to nonrefundable status.
Pence’s idea enters the picture as an addition to the current IRS tax credit; he wants Indiana taxpayers who qualify to be able to claim 10 percent of the federal amount, or roughly $1,300, on their state income taxes.
Reaction to Pence’s idea so far seems to be light, probably as the public absorbs the elements of a broader agenda of family issues he is parading out this winter.
Those limited reactions that have reached the horizon seem to support Pence’s thinking (sample headline: “Adoption supporters laud Pence tax-credit plan”). Some who support the idea of a state tax credit do, however, contend that it should be larger.
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http://www.tribstar.com/editorials/x1186923884/EDITORIAL-A-tax-credit-for-adoptive-parents
