S 757119th CongressIn Committee

Tribal Adoption Parity Act

Introduced: Feb 26, 2025

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Tribal Adoption Parity Act would update the federal Adoption Tax Credit framework to treat Indian tribal governments the same as states when determining whether a child qualifies as having “special needs” for the purposes of the credit. Specifically, it amends the Internal Revenue Code to allow a tribal government to determine if a child has special needs (in the same way a state does). The change applies to tax years beginning after enactment. The goal is to create parity between states and tribal governments, facilitating eligibility for adoptive families adopting children from tribal contexts.

Key Points

1Adds Indian tribal governments as an acceptable authority to determine whether a child has “special needs” for the adoption credit, by inserting “or Indian tribal government” after the word “State” in two places within IRC section 23(d)(3)(A) and (B).
2Applies the change to taxable years beginning after the enactment date (no retroactive effect; effective date set upon enactment).
3Brings tribal determinations in line with state determinations, creating parity in eligibility criteria for the adoption credit.
4Maintains the existing structure and credit framework; does not create new credit amounts or increase funding—simply broadens who can make the special needs determination.
5Aims to improve accessibility of the adoption credit for families adopting children from tribal settings by allowing tribal determinations to be used in qualifying for the credit.

Impact Areas

Primary group/area affected: Families adopting children who are from tribal contexts or otherwise connected to Indian tribes; Indian tribal governments and tribal adoption programs.Secondary group/area affected: The Internal Revenue Service, tax professionals, and adoption service providers who assist with the adoption credit and its special needs determinations; states and tribes that administer or coordinate such determinations.Additional impacts: Administrative and coordination considerations for tribes to implement formal “special needs” determinations; potential changes in how tribal-adoption cases are evaluated for the credit, with possible downstream effects on eligible adoption expenses claimed and timing of credit claims. No new spending is authorized; the change is procedural/administrative in nature.

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