The Disappearing US Adoption Tax Credit?

This year, the US adoption tax credit dropped to $12,650 -- $710 less than the $13360 tax credit available in 2011.  Also this year, the tax credit is not refundable.  In other words, adoptive parents may use the tax credit to reduce and potentially even eliminate their tax bill for 2012 but they may no longer receive a refund for any unused portion of their adoption tax credit. 

As if these changes were not bad enough for adoptive families, next year, the adoption tax credit is scheduled to be eliminated except for those families adopting special needs children inside the US.  While it is possible Congress will take action and extend the availability of the adoption tax credit into 2013 and beyond, it is also possible Congress will not take any action on this front.  At this point, there is not much that adoptive or prospective adoptive parents can do other than contact their representatives in Washington.  To the extent they have some control over the timing of their pending adoptions, prospective adoptive parents may also want to complete their adoptions in 2012 if this is at all possible.  This way, they will at least know they are entitled to the $12,650 tax credit.