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ADVOCATE NCFA’S Legislative and Policy Priorities for 2018 by ERIN BAYLES, RYAN HANLON, and CHUCK JOHNSON

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ADVOCATE NCFA’S Legislative and Policy Priorities for 2018 by ERIN BAYLES, RYAN HANLON, and CHUCK JOHNSON A PUBLICATION OF NATIONAL COUNCIL FOR ADOPTION January 2018 January NO. ADOPTION 115 Christie Renick, editor ADVOCATE NCFA’s Legislative and Policy Priorities for 2018 BY ERIN BAYLES, RYAN HANLON, AND CHUCK JOHNSON s our name indicates, National Council For Adoption (NCFA) is an organization for and about the advocacy of adoption. NCFA is narrowly focused on the issues of advocacy, policy, and practice across all adoption types, including domestic, Afoster care, and intercountry adoption as viable solutions for children who need stable permanency that will only be achieved through the legal and time-tested option of adoption. Passionately committed to the belief that every child deserves to thrive in a nurturing, permanent family, NCFA’s mission is to meet the diverse needs of children, birth parents, adopted individuals, adoptive families, and all those touched by adoption through global advocacy, education, research, legislative action, and collaboration. Within that list of actions, NCFA is very often associated with our legislative work on Capitol Hill in support of adoption-related legislation—a record and reputation for which we are quite proud. As much as NCFA may be rightly associated with legislative action, we also devote significant time and resources to other types of adoption-specific advocacy across all three types of adoption, promotion of best practices in adoption, educational and public awareness programs/campaigns, and oversight of our ongoing and acclaimed research projects. We have been fortunate in our legislative advocacy at the federal level in that adoption is viewed as one of the least partisan issues on Capitol Hill. With 225 N. Washington Street the exception of a very small handful of adoption-related policies, adoption Alexandria, VA 22314 (703) 299-6633 www.adoptioncouncil.org ADOPTION ADVOCATE ADOPTION ADVOCATE NO. 115 | January 2018 | | NO. 115 | January 2018 2 is not seen as a “liberal” or “conservative” issue, evidenced by the fact that Did you Know? the Congressional Coalition on Adoption is the largest bicameral, bipartisan caucus in Congress.1 And it is in that spirit that NCFA has pledged to take no The Congressional position or engage in any activity that would appear to politicize or polarize Coalition on Adoption the strong bi-partisan support of adoption in Congress. Lastly, and in keeping is the largest bicameral, with our mission statement, we would be remiss in not mentioning that NCFA works very closely and collaboratively with a diverse network of bipartisan caucus in adoption professionals, child welfare organizations, groups, and individuals Congress. in which we have found common ground on one or more specific legislative issues—and these partnerships have contributed to our collective successes. A good example of effective group advocacy is with the Adoption Tax Credit Working Group—more than 150 organizations committed to preserving and improving the adoption tax credit, and for which NCFA serves on the executive committee.2 Annually, NCFA staff, Board, and consultants assess the most critical needs in adoption to develop a strategic plan for addressing existing legislation that NCFA will support as well as the potential for new legislation for which we will advance or stake out a public position. This legislative strategy helps us better know how to allocate resources, effectively direct our advocacy efforts, identify areas for collaboration with others, and discipline ourselves to remain on mission. Avoiding “mission-drift” requires our internal discipline, as all of us at NCFA identify as advocates for children and, as an example of the potential of drifting, nowhere is significant reform more required than in our nation’s broken foster care system. However, with adoption as our only focus, NCFA must restrict our advocacy efforts to the nearly 118,0003 children in foster care awaiting adoption and not to the larger issue of foster care reform that many of us personally would like to see. For 2018, NCFA has identified five legislative goals for which we will advocate. In this article, we will articulate a rationale and a justification of the need for passage of each one. Adoption Tax Credit By Erin Bayles Background The Adoption Tax Credit (ATC) is a nonrefundable tax credit that adoptive families use to help offset some of the high costs of adoption. The current 1 http://www.ccainstitute.org/about/about-us 2 https://www.reuters.com/article/us-trump-effect-tax-powerless/how-parents-of-adopted-children-foiled-a-u-s-republican-tax-proposal- idUSKBN1DU33L 3 https://www.acf.hhs.gov/sites/default/files/cb/afcarsreport24.pdf NATIONAL COUNCIL FOR ADOPTION | www.adoptioncouncil.org NATIONAL COUNCIL FOR ADOPTION | www.adoptioncouncil.org ADOPTION ADVOCATE | NO. 115 | January 2018 3 credit is $13,570 per child for couples finalizing an adoption in 20174, though the credit can be spread out over several years to reduce the families’ tax liability for multiple years and help them get the most value from the credit. The tax credit can be used for adoptions from U.S. foster care, domestic infant adoptions, and intercountry adoptions. Challenges While NCFA believes the ATC is a vital credit that has helped thousands of families afford costly adoptions, we also believe that making the adoption tax credit a refundable credit would make it work better for children and families, particularly in the area of encouraging the adoption of children currently in foster care. In tax years 2010 and 2011, the adoption tax credit was refundable, meaning that families did not have to have any tax liability to receive the full amount of the credit and could claim it in a single year rather than having to spread it out over several years. In its current nonrefundable state, not all families can utilize it in the same way, and most will never receive its full benefit. In the past four years, the tax credit has helped more than 220,000 families, providing an average annual tax credit of just under $4,500.5 Three key facts about the ATC: 1. When the ATC was refundable, families with lower incomes were able to receive the full benefit of the credit, increasing the likelihood of more children being adopted from foster care. In its nonrefundable state, the ATC only goes against tax liability— which benefits middle-income families but is not as helpful to families with lower incomes who presumably would benefit most from the credit. Of the families adopting from foster care, 62 percent do not receive the full benefit of the ATC, even when spreading it out over several years. Families making between $50,000–$75,000 receive a mean credit of just over $5,000 while families making $30,000–$50,000 are receiving just $1,200.6 Refundability would assist all adoptive families, except those excluded due to high incomes, by allowing them the full amount of the credit to go toward not only their original adoption costs but also helping them better care for the ongoing needs of their child(ren). 2. Many of the high costs of private and intercountry adoption come before a family even brings home their child. Homestudies, lawyer and court fees, agency fees, background checks, and 4 http://www.taxpolicycenter.org/briefing-book/what-adoption-tax-credit 5 https://www.irs.gov/statistics/soi-tax-stats-individual-income-tax-returns-publication-1304-complete-report 6 http://www.taxpolicycenter.org/briefing-book/what-adoption-tax-credit NATIONAL COUNCIL FOR ADOPTION | www.adoptioncouncil.org ADOPTION ADVOCATE ADOPTION ADVOCATE NO. 115 | January 2018 | | NO. 115 | January 2018 4 fingerprinting are required for an adoption and can be pricey. Many families will take out loans, borrow money from friends and family, fundraise, or rack up credit card debt due to all these fees. Refundability helps ease the financial burden of these families immediately following the legal finalization of the adoption. 3. A refundable ATC will actually save taxpayer money and help ease the strained foster care system by incentivizing some foster families to pursue finalization of the adoption. The onetime adoption credit of $13,840 pales in comparison to keeping a child in the foster care system. The average annual net savings for one child being adopted out of foster care is estimated to be $15,480 nationally.7 Not only that, but many states’ foster systems are currently overrun due to the opioid crisis and do not have a sufficient number of foster or adoptive families in which to place children.8 With almost 118,000 children in the system waiting to be adopted, getting children out of the system and into a stable family would ease that burden and give children the permanency that is in their best interests. What Others Are Saying The adoption tax credit historically has been a popular tax policy and has enjoyed broad bipartisan support for more than two decades. The main criticism of the ATC is that, in its current form, it is not realizing its full potential and helping all the families who are adopting children. Although made a permanent part of the tax code in 2012, the ATC was scheduled for elimination in the original Tax Cuts and Jobs Act proposal introduced in the House of Representatives in November 2017. In response, thousands of families and hundreds of organizations on all sides of the political spectrum spoke out in favor of preserving the ATC. Many influential groups, such as the United States Conference of Catholic Bishops, issued statements, calling the ATC “life-affirming resistance” and “vital to the pro-family movement.”9 The swift actions of the proponents of the ATC and intense public backlash against elimination of this specific tax credit resulted in an amendment by Ways and Means Committee Chairman Kevin Brady to reinstate the ATC.
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