This part makes part of the adoption credit refundable. Up to $5,000 may be paid out even with no tax owed. That figure grows with prices from 2025. The changes start with tax years after December 31, 2024.
The document says “shall”Who acts: Secretary of the TreasuryHow: statuteSec. 70402 in the PDF
What the document says
“So much of the credit allowed under paragraph (1) as does not exceed $5,000 shall be treated as a credit allowed under subpart C and not as a credit allowed under this subpart.”
The section adds a new paragraph (4) to section 23(a) of the Internal Revenue Code of 1986 treating so much of the credit as does not exceed $5,000 as allowed under subpart C rather than under the subpart that otherwise governs it.
What the document actually says
“So much of the credit allowed under paragraph (1) as does not exceed $5,000 shall be treated as a credit allowed under subpart C and not as a credit allowed under this subpart.”
That sentence, in plain words
The first $5,000 of the credit moves to a different part of the tax code.
What this is about
That part covers credits that can be paid out. So up to $5,000 can come back as cash. That holds even with no tax owed.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: Secretary of the TreasuryHow: statuteSec. 70402 in the PDF
What the document says
“In the case of the dollar amount in subsection (a)(4), paragraph (1) shall be applied--”
The section rewrites section 23(h) of the Internal Revenue Code of 1986 so that the dollar amounts in paragraphs (3) and (4) of subsection (a) and paragraphs (1) and (2)(A)(i) of subsection (b) rise for a taxable year beginning after December 31, 2002 by a cost of living adjustment measured from calendar year 2001, rounded to the nearest $10, and so that for the new refundable amount that rule is read with 2025 in place of 2002 and calendar year 2024 in place of calendar year 2001.
What the document actually says
“In the case of the dollar amount in subsection (a)(4), paragraph (1) shall be applied--”
That sentence, in plain words
The new refundable figure is treated apart. The two changes that follow set how it grows.
What this is about
Its base year is 2025 rather than 2002. Its price measure runs from 2024. Any rise is rounded to the nearest $10.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
“Section 23(c)(1) is amended by striking "credit allowable under subsection (a)" and inserting "portion of the credit allowable under subsection (a) which is allowed under this subpart".”
The section narrows section 23(c)(1) of the Internal Revenue Code of 1986 so that only the part of the credit allowed under that subpart may be carried forward, leaving the refundable part out.
What the document actually says
“Section 23(c)(1) is amended by striking "credit allowable under subsection (a)" and inserting "portion of the credit allowable under subsection (a) which is allowed under this subpart".”
That sentence, in plain words
A phrase is taken out of a tax rule. A narrower phrase is put in.
What this is about
The rule lets unused credit be carried forward. Only the non-refundable part may be. The refundable part is paid out instead.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall apply”Who acts: Secretary of the TreasuryHow: statuteSec. 70402 in the PDF
What the document says
“The amendments made by this section shall apply to taxable years beginning after December 31, 2024.”
The section applies its amendments to taxable years beginning after December 31, 2024.
What the document actually says
“The amendments made by this section shall apply to taxable years beginning after December 31, 2024.”
That sentence, in plain words
The changes start with tax years that begin after December 31, 2024.
What this is about
Earlier tax years are not touched. The old rules still hold for them. The date is fixed in the law.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
Each distinct thing the section does: make part of the credit refundable, rewrite the inflation adjustment including the special rule for the refundable amount, keep the refundable part out of the carryforward, and fix the effective date.
Nothing in the section is left out. It has four subsections and each is recorded.
The section works by amending section 23 of the Internal Revenue Code of 1986, which is not indexed here, so how the adoption credit is otherwise worked out cannot be checked against anything on this site.
