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This bill would make two tax changes for families. First, it would increase the federal tax credit for adoption from $10,000 to $25,000, including the amount for adopting a child with special needs. It would also update the credit so it can rise with inflation using a newer base year. Second, it would create a new tax credit for certain in vitro fertilization, or IVF, medical expenses paid by a taxpayer or their spouse. The goal is to give more financial help to people who are adopting or trying to have a child through IVF.
- The adoption tax credit would rise from $10,000 to $25,000.
- The special needs adoption credit would also be increased to $25,000.
- The bill changes how the adoption credit is adjusted for inflation, starting with tax years after December 31, 2025.
- A new tax credit would be created for qualified IVF medical expenses, and it would apply to expenses paid or incurred after the bill becomes law.
Official Summaries
This bill increases the adoption tax credit to $25,000 (from $17,280 in 2025) and establishes a nonrefundable tax credit for qualified in vitro fertilization expenses.
Under current law, the adoption tax credit is allowed for (1) qualified expenses incurred to adopt an eligible child up to the maximum statutory amount, or (2) the statutory maximum amount (regardless of actual expenses) if adopting an eligible child with special needs. The statutory maximum amount is $17,280 (per eligible child) in 2025, which is adjusted for inflation. Further, under current law, the adoption tax credit begins to phase out for individuals with a modified adjusted gross income exceeding $259,190 (in 2025 and adjusted for inflation), such that the tax credit completely phases out (in 2025) for individuals with a modified adjusted gross income of $299,190 or more.
The bill increases the adoption tax credit statutory maximum amount to $25,000. Further, under the bill, such amount continues to be adjusted annually for inflation.
Finally, under the bill, an individual is allowed a nonrefundable tax credit for expenses paid (or incurred) for medical care (e.g., treatment, insurance, and transportation) related to in vitro fertilization for the individual (or the individual’s spouse if filing a joint federal income tax return). However, an individual may not claim the in vitro fertilization tax credit and other allowed tax deductions or credits (e.g., medical expense tax deduction) for the same expenses.
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1427 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 1427
To amend the Internal Revenue Code of 1986 to increase the amount of
the adoption credit and to establish the in vitro fertilization
expenses credit.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 18, 2025
Mr. Mackenzie introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to increase the amount of
the adoption credit and to establish the in vitro fertilization
expenses credit.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. INCREASE IN ADOPTION CREDIT AMOUNT.
(a) In General.--
(1) Increase in credit for adoption of child with special
needs.--Section 23(a)(3) of the Internal Revenue Code of 1986
is amended--
(A) in the heading, by striking ``$10,000'' and
inserting ``$25,000'', and
(B) by striking ``$10,000'' and inserting
``$25,000''.
(2) Increase in maximum credit amount.--Section 23(b)(1) of
such Code is amended by striking ``$10,000'' and inserting
``$25,000''.
(b) Change in Base Year for Inflation Adjustment.--Section 23(h) of
such Code is amended to read as follows:
``(h) Adjustments for Inflation.--
``(1) In general.--In the case of a taxable year beginning
after December 31, 2025, each of the dollar amounts in
subsection (a)(3) and paragraphs (1) and (2)(A)(i) of
subsection (b) shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) The cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins, determined by substituting
`calendar year 2024' for `calendar year 2016' in
subparagraph (A)(ii) thereof.
``(2) Rounding.--If any amount as increased under paragraph
(1)is not a multiple of $10, such amount shall be rounded to
the nearest multiple of $10.
``(3) Special rule for income limitation.--In the case of
the dollar amount in subsection (b)(2)(A)(i), paragraph (1)
shall be applied--
``(A) by substituting `2002' for `2024' in the
matter preceding subparagraph (A), and
``(B) by substituting `calendar year 2001' for
`calendar year 2023' in subparagraph (B) thereof.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2024.
SEC. 2. IN VITRO FERTILIZATION EXPENSES CREDIT.
(a) In General.--Part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after section 25E
the following new section:
``SEC. 25F. IN VITRO FERTILIZATION EXPENSES.
``(a) Credit Allowed.--In the case of an individual, there shall be
allowed as a credit against the tax imposed by this chapter the amount
of the qualified in vitro fertilization expenses paid or incurred by
the taxpayer during the taxable year.
``(b) Qualified in Vitro Fertilization Expenses.--For purposes of
this section, the term `qualified in vitro fertilization expenses'
means amounts paid or incurred for medical care (as defined in section
213(d)) relating to in vitro fertilization for the taxpayer (or the
taxpayer's spouse, in the case of a joint return).
``(c) No Double Benefit.--Any qualified in vitro fertilization
expense which would (but for this subsection) be taken into account for
purposes of any deduction (or any credit other than the credit allowed
under this section) shall be reduced by the amount of the credit
allowed under subsection (a) with respect to such expense.''.
(b) Clerical Amendment.--The table of sections for Part IV of
subchapter A of chapter 1 of such Code is amended by inserting after
the item relating to section 25E the following new item:
``Sec. 25F. In vitro fertilization expenses.''.
(c) Effective Date.--The amendments made by this shall apply to
amounts paid or incurred after the date of the enactment of this
section.
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