The proposed bill, if enacted, would amend the current statute regarding individual income tax deductions for unreimbursed adoption expenses. Under current law, taxpayers can subtract up to $3,000 for these expenses, which include medical costs, counseling, legal fees, and other related costs incurred in the year the final adoption order is granted. The bill would increase this subtraction to $5,000 for single individuals or heads of households and $10,000 for married couples filing jointly or separately, applicable for taxable years beginning January 1, 2026.

Additionally, the bill clarifies that the subtraction for unreimbursed adoption expenses may include costs incurred in prior years, but the deduction can only be claimed in the year the final adoption order is granted. It also specifies that for couples filing separately, the total deduction cannot exceed $10,000, allowing for flexibility in how the deduction is divided between the spouses. Overall, the bill aims to provide greater financial support for families undergoing the adoption process.

Statutes affected:
Introduced Version: 43-1022
House Engrossed Version: 43-1022