To amend the Internal Revenue Code of 1986 to allow an additional credit against income tax for the adoption of an older child.

October 20, 2005

Ms. BEAN (for herself and Ms. HART) introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to allow an additional credit against income tax for the adoption of an older child.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Advocates Dedicated to Older Child Parental Tax Credit (ADOPT) Act of 2005'.

SEC. 2. OLDER CHILD ADOPTION TAX CREDIT.

(a) In General- Subsection (a) of section 23 of the Internal Revenue Code of 1986 (relating to adoption expenses) is amended by inserting at the end the following new paragraph:

`(4) CREDIT FOR ADOPTION OF QUALIFIED OLDER CHILD REGARDLESS OF EXPENSES- In the case of an adoption of a qualified older child by a taxpayer which becomes final during a taxable year, the taxpayer shall be treated as having paid, for each taxable year during the older child credit allowance period, qualified adoption expenses with respect to such adoption in an amount equal to $2,000.'.

(b) Dollar Limitation not Applicable- Subsection (b)(1) of such section of such Code is amended by inserting `(without regard to paragraph (4) of such subsection)' after `subsection (a)'.

(c) Income Limitation not Applicable- Subsection (b)(2)(A) of such section of such Code is amended by inserting `paragraph (4) of such subsection and' before `subsection (c)'.

(d) Definitions- Subsection (d) of such section of such Code is amended by inserting at the end the following new paragraphs:

`(4) QUALIFIED OLDER CHILD- The term `qualified older child' means an eligible child who has attained age 9 on or before the date on which the legal adoption of such child by the taxpayer becomes final.

`(5) OLDER CHILD CREDIT ALLOWANCE PERIOD- In the case of an adoption of a qualified older child by a taxpayer, the term `older child credit allowance period' means the taxable years--

`(A) beginning after the taxable year during which the adoption of the qualified older child by the taxpayer becomes final, and

`(B) ending before the taxable year during which the qualified older child has attained age 19.'.

(e) Adjustments for Inflation- Subsection (h) of such section of such Code is amended--

(1) by striking `subsection (a)(3)' and inserting `paragraphs (3) and (4) of subsection (a)', and

(2) by amending paragraph (2) to read as follows:

`(2) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined--

`(A) in the case of the dollar amounts in subsection (a)(3) and paragraphs (1) and (2)(A)(i) of subsection (b), by substituting `calendar year 2001' for `calendar year 1992' in subparagraph (B) thereof, and

`(B) in the case of the dollar amount in subsection (a)(4), by substituting `calendar year 2005' for `calendar year 1992' in subparagraph (B) of such section 1(f)(3).'.

(f) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2005.

END