TITLE OF BILL: An act to amend the tax law, in relation to providing
for a deduction from personal gross income for expenses incurred in the
adoption of a child in the foster care system
PURPOSE OR GENERAL IDEA OF THE BILL: In order to decrease the length of
wait time for adoption of children in the foster care system and to
create incentives to decrease the number of children in foster care
waiting to be adopted, this legislation creates a tax deduction for all
expenses incurred by the family adopting children from the foster care
SUMMARY OF SPECIFIC PROVISIONS:
Section 1: Subsection (c) of section 612 of the tax law is amended by
adding a new paragraph 39 which lists income tax deductibles for eligi-
ble families adopting a child in the foster care system.
Section 2: Provides for immediate effective date and shall apply to all
taxable years beginning on or after the first of January in the year in
which it shall have become law.
JUSTIFICATION: Currently, New York State has over 23,000 children in
custody in its foster care system. For a large number of these children,
returning to their natural parents is impossible. In 2011, there were
over 6,400 foster care children waiting to be adopted and the median
years each has to wait to be adopted is close to 4.5 years.
At an annual cost to New York State of over $33,000 per child in state
custody, it is obvious that New York State government must do more to
create incentives for families interested in adopting a child in the
foster care system. This legislation gives adoptive families an income
tax deduction for all the expenses incurred in such an adoption.
In addition, it is a well understood dynamic that the longer a child is
in the foster care system, the slimmer the chances for adoption. As
children age in state custody it becomes a negative for them because
families tend to adopt younger children. Therefore New York must do more
to place these children in healthy, loving and nurturing home environ-
ments. At a total annual cost of over $759 million dollars to maintain
the 23,000 in state custody, it is clearly in the best interest of these
children and to New York taxpayers to create incentives to reduce the
number of children in government custody.
PRIOR LEGISLATIVE HISTORY: New Legislation.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENT: Currently, New York
spends over $33,000 annually for each child in the foster care system.
In 2011, there were over 6,400 foster care children waiting to be
adopted, but only about 7% or about 417 children were actually adopted.
Allowing families to deduct the estimated $2,000 to $10,000 in expenses
incurred to adopt a child reduces the amount paid in taxes to NYS by
less than $600 per each adoption. Obviously, it makes enormous economic
sense to lose $600 per adoption in tax collection by creating incentives
to remove children from state custody at the current yearly cost of over
$33,000 per child.
Based on 2009 total adoptions from the foster care system, which placed
2,100 children with adoptive families, New York State tax collection
would be reduced by about one million dollars. However, with over 23,000
children in State custody, during any given year, at the stated annual
cost per child of over $33,000, the state will actually achieve savings
in excess of the Projected decrease in tax revenue for each child
adopted due to the incentives provided in this legislation.
EFFECTIVE DATE: This bill will take effect immediately.
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