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January 16, 2014

Statehouse panel approves proposed adoption tax credit

INDIANAPOLIS — An effort to increase adoptions and make the process more affordable advanced in a House committee Wednesday, a day after Gov. Mike Pence called for making Indiana the nation’s “most pro-adoption state.”

The Family, Children and Human Affairs Committee voted in favor of Pence’s proposal to offer a tax credit that would offset adoption costs. Pence discussed adoption during Tuesday’s State of the State address.

Supporters of the credit say it could help prospective parents overcome a key hurdle to adoption: its cost, which can reach $30,000, according to Megan Lindsey, director of public policy and education at the National Council for Adoption.

“The adoption tax credit is incredibly important,” Michele Jackson, executive director of Indianapolis-based MLJ Adoptions Inc., told the committee Wednesday. “Finance is probably the No. 1 reason people do not pursue an adoption.”

About 75-100 Indiana children who are wards of the state are eligible for adoption, as well as children in private agencies who are looking for homes, Department of Child Services spokesman James Wide said.

The federal government already offers a tax credit for adoptive parents. Any Indiana adoptive parents eligible for the federal tax credit would also be eligible for the proposed state credit.

Data from the National Conference of State Legislatures show at least 13 states offered adoption tax credits as of 2012, and another 10 offered some form of deduction. Lindsey said tax credits often cost less than paying for children to remain in foster care, but not all states have the funds to enact a tax credit.

Money could be an issue in Indiana as well. Analysts for the Legislative Services Agency estimate the program will cost $300,000 to $400,000 a year.  

Despite support from several adoption advocacy groups, others question pushing the tax credit when some families still are waitlisted to receive a different state adoption subsidy, one to assist adoptive parents of special needs children.

“The cost to this would probably be higher, but why spend money on tax credits for adoption when they already made promises they’re not paying money for?” said Josh Kroll, Adoption Subsidy Resource Center coordinator at the North American Council on Adoptable Children.

The bill also would establish a committee to study other states’ adoption programs to improve Indiana policy, including streamlining the process. Current state adoption processes are too complicated, said Rep. Rebecca Kubacki of Syracuse, an adoptive mother and the author of the bill.

“We have so many families that want to adopt children (and) so many children that want to be adopted,” she said. “How do we make that as easy as possible?”

The bill will now likely go to the House Ways and Means Committee, which will review its fiscal impact, said Kubacki.

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