Iowa House Bill HF2637

Iowa 2023-2024 Regular Session

• Introduced: 2/28/24
• Engrossed: 3/11/24
• Refer: 3/12/24

Caption

A bill for an act relating to the adoption tax credit available against the individual income tax, and including effective date and retroactive applicability provisions.(Formerly HF 2243.)

Impact

The implications of HF2637 are significant for state tax law regarding adoption. By increasing the tax credit, the bill seeks not only to incentivize adoption but also to provide greater financial support to families during the adoption process. The retroactive applicability of the law to January 1, 2023, means that families who adopted children after this date will be able to benefit from the enhanced tax credit when they file their taxes. This change is likely to improve the financial landscape for prospective adoptive parents and may result in increased adoption rates as families find the process more economically feasible.

Summary

House File 2637, recently introduced in Iowa, focuses on enhancing the adoption tax credit available to taxpayers. The bill proposes an increase in the tax credit from the current limit of $5,000 to $20,000 for qualified adoption expenses per adoption. The measure aims to alleviate the financial burden placed on families adopting children, encouraging more potential adoptive families to pursue adoption. The bill outlines what qualified adoption expenses entail, including unreimbursed costs related to adoption, medical expenses for the birth mother, and various agency and legal fees involved in the adoption process.

Contention

While there appears to be broad support for HF2637, as indicated by its unanimous passage with 99 votes in favor, there may still be discussions around the sustainability of such tax incentives. Critics could raise questions about the impact on state revenues given the substantial increase in refundable tax credits, alongside concerns about equitable access and whether such financial incentives directly translate to increased adoptions. Nonetheless, proponents of the bill view this as a crucial step toward fostering stronger family units and supporting children in need of loving homes.