[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 520 Introduced in Senate (IS)]







104th CONGRESS
  1st Session
                                 S. 520

 To amend the Internal Revenue Code of 1986 to allow a refundable tax 
                     credit for adoption expenses.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                March 9 (legislative day, March 6), 1995

  Mr. Shelby introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to allow a refundable tax 
                     credit for adoption expenses.

    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 ``Adoption Assistance for Families 
Act''.

SEC. 2. REFUNDABLE CREDIT FOR ADOPTION EXPENSES.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 35 as section 36 and by inserting 
after section 34 the following new section:

``SEC. 35. ADOPTION EXPENSES.

    ``(a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by this subtitle 
for the taxable year the amount of the qualified adoption expenses paid 
or incurred by the taxpayer during such taxable year.
    ``(b) Limitations.--
            ``(1) Dollar limitation.--The aggregate amount of qualified 
        adoption expenses which may be taken into account under 
        subsection (a) with respect to the adoption of a child shall 
        not exceed $5,000.
            ``(2) Income limitation.--The amount allowable as a credit 
        under subsection (a) for any taxable year shall be reduced (but 
        not below zero) by an amount which bears the same ratio to the 
        amount so allowable (determined without regard to this 
        paragraph but with regard to paragraph (1)) as--
                    ``(A) the amount (if any) by which the taxpayer's 
                adjusted gross income exceeds $60,000, bears to
                    ``(B) $40,000.
            ``(3) Denial of double benefit.--
                    ``(A) In general.--No credit shall be allowed under 
                subsection (a) for any expense for which a deduction or 
                credit is allowable under any other provision of this 
                chapter.
                    ``(B) Grants.--No credit shall be allowed under 
                subsection (a) for any expense to the extent that funds 
                for such expense are received under any Federal, State, 
                or local program.
    ``(c) Qualified Adoption Expenses.--For purposes of this section, 
the term `qualified adoption expenses' means reasonable and necessary 
adoption fees, court costs, attorney fees, and other expenses which are 
directly related to the legal adoption of a child by the taxpayer and 
which are not incurred in violation of State or Federal law or in 
carrying out any surrogate parenting arrangement. The term `qualified 
adoption expenses' shall not include any expenses in connection with 
the adoption by an individual of a child who is the child of such 
individual's spouse.
    ``(d) Married Couples Must File Joint Returns.--Rules similar to 
the rules of paragraphs (2), (3), and (4) of section 21(e) shall apply 
for purposes of this section.''
    (b) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting before the period ``, or 
        from section 35 of such Code''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by striking the last item and inserting the 
        following:

                              ``Sec. 35. Adoption expenses.
                              ``Sec. 36. Overpayments of tax.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1995.
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