Nonrefundable adoption expense tax credit

# (1)

As used in this section:

# (a)

"Adoption expense" means a reasonable and necessary adoption fee, court cost, attorney fee, or other expense that is:

(i) directly related to, and for the primary purpose of, adoption of a qualifying child through a domestic adoption;

(ii) not incurred in violation of federal or state law or in carrying out any surrogate parenting arrangement; and

(iii) not paid or reimbursed by any employer or state assistance program.

# (b)

"Domestic adoption" means an adoption of a child who is a United States citizen or a resident of the United States or its possessions before the adoption effort begins.

# (c)

(i)
"Qualifying child" means an individual who is under 18 years old.

(ii)
"Qualifying child" does not include an individual who is a child of the claimant's spouse.

# (d)

"Qualifying claimant" means a claimant:

(i) whose adjusted gross income on a federal tax return is:

(A) for a claimant who files the federal tax return jointly with the claimant's spouse, $55,000 or more but less than $110,000; or

(B) for a claimant who files the federal tax return other than jointly, $27,500 or more but less than $55,000;

(ii) who did not, and if the claimant is married, whose spouse did not, receive state or federal assistance during the taxable year in which the adoption is finalized; and

(iii) who applies for and receives a certification described in Section 35A-1-111 from the Department of Workforce Services.

# (e)

(i)
"State or federal assistance" means public funds that are:

(A) expended for the benefit of an individual in need of financial, medical, food, housing, or related assistance;

(B) means tested; and

(C) provided by a state or the federal government.

(ii)
"State or federal assistance" includes:

(A) the Medicaid program, as defined in Section 26B-3-101;

(B) the Employment Support Act described in Title 35A, Chapter 3, Employment Support Act;

(C) the Children's Health Insurance Program created in Title 26B, Chapter 3, Part 9, Utah Children's Health Insurance Program;

(D) the Supplemental Nutrition Assistance Program established in 7 U.S.C. Chapter 51, Supplemental Nutrition Assistance Program;

(E) the Women, Infants, and Children Program established in 42 U.S.C. Sec. 1786;

(F) the federal Social Security Act; and

(G) housing assistance.

(iii)
"State or federal assistance" does not include an income tax credit, subtraction, or deduction.

# (2)

Subject to Section 59-10-1002.2, a qualifying claimant may claim, in the taxable year in which the adoption is finalized, a nonrefundable tax credit equal to the lesser of:

# (a)

$3,500; or

# (b)

the amount of the qualifying claimant's adoption expenses.

# (3)

A qualifying claimant may carry forward, to the next three taxable years, the amount of any tax credit that exceeds the qualifying claimant's tax liability for the taxable year.

# (4)

A qualifying claimant may not claim a credit under this section to the extent that the qualifying claimant claims a federal tax credit under 26 U.S.C. Sec. 23 for the same adoption expense.

# (5)

A qualifying claimant who is married may claim a tax credit under this section only if the qualifying claimant and the qualifying claimant's spouse file a joint federal income tax return.