HR 1427119th CongressIn Committee

To amend the Internal Revenue Code of 1986 to increase the amount of the adoption credit and to establish the in vitro fertilization expenses credit.

Introduced: Feb 18, 2025

Standard Summary

Comprehensive overview in 1-2 paragraphs

H.R. 1427 would (1) raise the federal adoption credit amount for adopting a child with special needs from $10,000 to $25,000 (and set the maximum credit at $25,000), and (2) create a new nonrefundable in vitro fertilization (IVF) expenses credit equal to qualified IVF medical expenses paid or incurred by the taxpayer (or the taxpayer’s spouse on a joint return). The bill also modifies how adoption credits are adjusted for inflation, and it adds a new section (25F) to codify the IVF credit, including rules to prevent double-dipping with other deductions or credits. The adoption provisions take effect for tax years beginning after December 31, 2024; the IVF credit applies to amounts paid or incurred after the date of enactment.

Key Points

1Adoption credit increase
2- Increases the section 23(a)(3) credit amount (for adoption of a child with special needs) from $10,000 to $25,000.
3- Increases the overall maximum adoption credit (section 23(b)(1)) from $10,000 to $25,000.
4- The changes affect inflation indexing and related rules so future credit amounts adjust with inflation.
5Inflation adjustments
6- Amends section 23(h) to provide new rules for adjusting the adoption credit amounts for inflation starting in tax years after 2025.
7- Uses the cost-of-living adjustment under section 1(f)(3), with specific substitutions to align the adjustment with calendar year 2024 as the base.
8- Includes rounding rules and a special rule for the income-based phaseout thresholds (reference years 2002/2001 adjustments).
9In vitro fertilization expenses credit (new)
10- Adds a new section 25F creating a nonrefundable credit equal to qualified IVF expenses paid or incurred in the tax year.
11- Qualified IVF expenses are amounts paid or incurred for medical care related to IVF for the taxpayer or, on a joint return, the taxpayer’s spouse.
12- No double benefit rule: if an IVF expense would also be deductible or eligible for another credit, the IVF credit is reduced by the amount of the credit allowed for that expense.
13- Clerical change to insert a new Sec. 25F into the table of sections (Part IV, subchapter A, chapter 1).
14- Effective for amounts paid or incurred after enactment (i.e., after the date the bill becomes law).
15Legislative process and scope
16- The bill is introduced in the House and referred to the Ways and Means Committee; changes would be implemented through the tax code.

Impact Areas

Primary group/area affected- Families considering or pursuing adoption of a child with special needs (significant boost in available credit amounts and inflation adjustments).- Individuals or couples undergoing IVF treatment (new tax credit directly offsetting IVF-related medical expenses).Secondary group/area affected- Taxpayers with adoption-related expenses not specifically for special-needs cases, to the extent those credits apply under the revised provisions (the bill’s focus remains on special-needs adoptions for the higher credit ceiling).- Taxpayers with high medical costs related to IVF (credit could offset a portion of those costs, depending on tax liability and eligibility).Additional impacts- The IVF credit is nonrefundable (as drafted) and would not create a refund beyond tax owed; it would only reduce tax liability.- The changes to inflation indexing for adoption credits aim to keep real value over time, potentially increasing eligibility in higher-cost years.- Administrative considerations include the interaction with other medical deductions/credits and the need to track qualified IVF expenses separately.As introduced, the bill sets explicit dollar amounts and indexing mechanics; enactment would require passage by Congress and signature into law, after which the dates of applicability would govern when filers could claim these credits.This summary reflects the bill’s text and does not reflect any committee amendments or potential revisions during floor consideration.

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