Establishes a tax credit for allowable expenses associated with the adoption of a child by a resident taxpayer; defines relevant terms.
TITLE OF BILL: An act to amend the tax law, in relation to the establishment of a tax credit for the adoption of a child
PURPOSE: To amend section 606 of the tax law to allow persons who adopt children to receive a tax credit.
SUMMARY OF PROVISIONS: Section 606 of the tax law is amended to provide taxpayers who adopt children the option of claiming a tax credit for allowable adoption expenses. Section 2 defines "allowable adoption expenses" and "qualified adoption expenses". Section 3 clarifies the amount of allowable adoption expenses.
JUSTIFICATION: In order to adopt a child there are high costs that potential adoptive parents would have to incur and therefore, many are discouraged. These high costs include, but are not limited to, adoption fees, court costs, attorney fees and travel expenses. This tax deduction would help to offset these "nonrecurring adoption expenses" and possibly encourage those people who want to adopt but are discouraged from doing so by the high costs associated with the adoption process.
EXISTING LAW: There is currently no tax credit for adoption expenses.
LEGISLATIVE HISTORY: S.5136 of 2007 04/25/07 Referred to Investigations & Government Operations S.136 of 2009 01107/09 REFERRED TO INVESTIGATIONS & GOVERNMENT OPERATIONS 01/06/10 REFERRED TO INVESTIGATIONS & GOVERNMENT OPERATIONS
FISCAL IMPLICATIONS: UNKNOWN at present time.
LOCAL FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: This act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2012.
STATE OF NEW YORK ________________________________________________________________________ 1638 2011-2012 Regular Sessions IN SENATE January 10, 2011 ___________Introduced by Sen. SAMPSON -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Govern- ment Operations AN ACT to amend the tax law, in relation to the establishment of a tax credit for the adoption of a child THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 606 of the tax law is amended by adding a new subsection (t-2) to read as follows: (T-2) ADOPTION CREDIT. (1) GENERAL. A RESIDENT TAXPAYER SHALL BE ALLOWED THE OPTION OF CLAIMING A CREDIT, TO BE COMPUTED AS PROVIDED IN PARAGRAPH THREE OF THIS SUBSECTION, AGAINST THE TAX IMPOSED BY THIS ARTICLE FOR ALLOWABLE ADOPTION EXPENSES FOR EACH CHILD ADOPTED. (2) ALLOWABLE AND QUALIFIED ADOPTION EXPENSES. FOR THE PURPOSES OF THIS CREDIT, (A) THE TERM "ALLOWABLE ADOPTION EXPENSES" SHALL MEAN THE AMOUNT OF QUALIFIED NONRECURRING ADOPTION EXPENSES PAID BY THE TAXPAYER DURING THE TAXABLE YEAR FOR EACH CHILD ADOPTED, LIMITED TO TEN THOUSAND DOLLARS, AND (B) THE TERM "QUALIFIED ADOPTION EXPENSES" SHALL MEAN THE EXPENSES REQUIRED FOR THE LEGAL ADOPTION OF A CHILD BY THE TAXPAYER OR THE TAXPAYER'S SPOUSE. (3) AMOUNT OF CREDIT. IF ALLOWABLE ADOPTION EXPENSES ARE LESS THAN FIVE THOUSAND DOLLARS, THE AMOUNT OF THE CREDIT PROVIDED UNDER THIS SUBSECTION SHALL BE EQUAL TO THE APPLICABLE PERCENTAGE OF THE LESSER OF ALLOWABLE ADOPTION EXPENSES OR TWO HUNDRED DOLLARS. IF ALLOWABLE ADOPTION EXPENSES ARE FIVE THOUSAND DOLLARS OR MORE, THE AMOUNT OF THE CREDIT PROVIDED UNDER THIS SUBSECTION SHALL BE EQUAL TO THE APPLICABLE PERCENTAGE OF THE ALLOWABLE ADOPTION EXPENSES MULTIPLIED BY FOUR PERCENT. SUCH APPLICABLE PERCENTAGE SHALL BE TWENTY-FIVE PERCENT FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND TWELVE, FIFTY PERCENT FOR TAXA- BLE YEARS BEGINNING IN TWO THOUSAND THIRTEEN, SEVENTY-FIVE PERCENT FOREXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD05900-01-1 S. 1638 2
TAXABLE YEARS BEGINNING IN TWO THOUSAND FOURTEEN AND ONE HUNDRED PERCENT FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND FIFTEEN. (4) REFUNDABILITY. THE CREDIT UNDER THIS SUBSECTION SHALL BE ALLOWED AGAINST THE TAXES IMPOSED BY THIS ARTICLE FOR THE TAXABLE YEAR REDUCED BY THE CREDITS PERMITTED BY THIS ARTICLE. IF THE CREDIT EXCEEDS THE TAX AS SO REDUCED, THE TAXPAYER MAY RECEIVE, AND THE COMPTROLLER, SUBJECT TO A CERTIFICATE OF THE COMMISSIONER, SHALL PAY AS AN OVERPAYMENT, WITHOUT INTEREST, THE AMOUNT OF SUCH EXCESS. S 2. This act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2012.