Tax Reform Bill Eliminates Tax Benefits Related to Adoption by Taxing Employer Assistance and Eliminating Tax Credit

Under the proposed Republican tax bill entitled the “Tax Cuts and Jobs Act” (Sec. 1406, Page 142) published yesterday, families seeking to adopt a child will suffer two significant cuts. First, the employer assistance credit for adoption will be eliminated.  Currently, if an employer provided assistance to a worker adopting a child up to $13,750, the employee pays no taxes on that assistance.  The proposed bill eliminates that provision and the assistance would be taxed as income.  Second, the adoption credit of up to $13,750 per eligible child will be repealed.  Currently, the credit is applicable for taxpayers with adjusted gross income of between a range of approximately $200,000 to $240,000.  To view the entire bill, please click on the attached hyperlink: https://waysandmeansforms.house.gov/uploadedfiles/bill_text.pdf