Code Section 23
| Code Section | Effective Date | Name of Act | Name of Provision | 10yr Revenue Estimate ($millions) |
|---|---|---|---|---|
| 21, 23, 45D, 137 | 12/31/2012 | The American Taxpayer Relief Act of 2012 | Other incentives for families and children | -7,580 |
| 23 and 137 | 12/31/2009 | Patient Protection and Affordable Care Act of 2010 | Expansion of Adoption Credit and the Exclusion from Gross Income for Employer-Provided Adoption Assistance | -1,206 |
| 21, 23, 36C, 45D, 137 | 12/31/2010 | The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 | Other Incentives for Families and Children | -973 |
Other incentives for families and children (includes extension of the adoption tax credit, employer-provided adoption assistance, employer-provided child care tax credit, and dependent care tax credit)
Explanation of Provision
Adoption credit and exclusion from income for employer-provided adoption assistance
The Act makes permanent the EGTRRA expansion of these two provisions. Therefore, for 2013, the maximum benefit is $12,170 (indexed for inflation after 2010). The adoption credit and exclusion are phased out ratably for taxpayers with modified adjusted gross income between $193,930 and $233,930 (indexed for inflation) for 2013.277 The 2012 rules relating to expenses for special needs adoptions are retained, and taxpayers remain able to offset their alternative minimum tax liability with the credit.
Employer-provided child care tax credit
The Act makes permanent the EGTRRA expansion of the employer-provided child tax credit.
Expansion of dependent care tax credit
The Act makes permanent the EGTRRA expansion of the dependent care tax credit.
Expansion of Adoption Credit and the Exclusion from Gross Income for Employer-Provided Adoption Assistance
Explanation of Provision
Tax credit
For 2010, the maximum credit is increased to $13,170 per eligible child (a $1,000 increase). This increase applies to both non-special needs adoptions and special needs adoptions. Also, the adoption credit is made refundable.
The new dollar limit and phase-out of the adoption credit are adjusted for inflation in taxable years beginning after December 31, 2010.
The EGTRRA sunset is delayed for one year (i.e., the sunset becomes effective for taxable years beginning after December 31, 2011).
Adoption assistance program
The maximum exclusion is increased to $13,170 per eligible child (a $1,000 increase).
The new dollar limit and income limitations of the employer-provided adoption assistance exclusion are adjusted for inflation in taxable years beginning after December 31, 2010.
The EGTRRA sunset is delayed for one year (i.e., the sunset becomes effective for taxable years beginning after December 31, 2011).967
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Other Incentives for Families and Children (includes extension of the adoption tax credit, employer-provided child care tax credit, and dependent care tax credit)
Explanation of Provision
Adoption credit and exclusion from income for employer-provided adoption assistance
The provision extends the EGTRRA expansion of these two benefits for one year (2012). Therefore, for 2012, the maximum benefit is $12,170 (indexed for inflation after 2010). The adoption credit and exclusion are phased out ratably for taxpayers with modified adjusted gross income between $182,520 and $222,520 (indexed for inflation after 2010).1550
Adoption credit and exclusion from income for employer-provided adoption assistance
The provision extends this tax benefit for two years (through
2012).
Adoption credit and exclusion from income for employer-provided adoption assistance
The provision extends the dependent care tax credit EGTRRA expansion for two years (through 2012).
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277- The changes to the adoption credit and exclusion from employer-provided adoption assistance for 2010 and 2011 (relating to the $1,000 increase in the maximum credit and exclusion and the refundability of the credit) enacted as part of the Patient Protection and Affordable Care Act, are not extended by the provision.
-Return to Explanation of Provision
967- Section 101(b) of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 terminated the amendments made by this provision for taxable years beginning after December 31, 2011, without regard to the EGTRRA sunset.
-Return to Explanation of Provision
1550- The changes to the adoption credit and exclusion from employer-provided adoption assistance for 2010 and 2011 (relating to the $1,000 increase in the maximum credit and exclusion and the refundability of the credit) enacted as part of the Patient Protection and Affordable Care Act, Pub. L. No. 111–148, are not extended by the provision.
-Return to Explanation of Provision
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