This bill amends the adoption tax credit available against the individual income tax in Iowa. It increases the maximum tax credit from $5,000 to $20,000 for qualified adoption expenses incurred by taxpayers in connection with the adoption of a child. The bill defines qualified adoption expenses to include unreimbursed costs such as medical and hospital expenses of the biological mother, welfare agency fees, legal fees, and other related costs. Additionally, any credit that exceeds the taxpayer's tax liability will be refundable.

The bill is effective immediately upon enactment and has retroactive applicability to tax years beginning on or after January 1, 2024, for adoptions that are finalized on or after that date. This change aims to provide greater financial support to families adopting children, thereby encouraging adoption and supporting the welfare of children in need of homes.

Statutes affected:
Introduced: 422.12A