Tax Code Overhaul: Adoption Credit Jumps to $25,000 and New IVF Credit Added

This bill straight-up rewrites parts of the tax code to make adoption and IVF treatments more affordable. It's doing two big things: boosting the adoption tax credit significantly and creating a brand-new credit for folks undergoing IVF.

Adoption Gets a Boost

The bill increases the adoption tax credit to $25,000—whether it's a child with special needs or not (Section 1). Previously, the maximum credit was capped at $10,000. So, if you're adopting, this could mean a lot more cash in your pocket to offset those hefty adoption fees. For example, imagine a couple finalizing their adoption in 2025; they could potentially see their tax bill reduced by up to $25,000, compared to the previous $10,000 limit. And starting in 2026, that $25,000 figure will be adjusted for inflation, using 2024 as the baseline (Section 1).

IVF: New Tax Relief on the Horizon

This is where it gets interesting for those struggling with infertility. The bill introduces a whole new tax credit specifically for qualified in vitro fertilization (IVF) expenses (Section 2). This means that the money you spend on IVF-related medical care—as defined by the IRS under Section 213(d)—could directly reduce your tax bill. Think of a software engineer paying for IVF treatments; those costs, which can easily run into the tens of thousands, could now be partially offset by this new tax credit.

Real-World Rollout

The increased adoption credit kicks in for any taxable year after December 31, 2024 (Section 1). So, if you're in the process of adopting, keep that date in mind. The IVF credit applies to any expenses paid or incurred after this bill becomes law (Section 2). It's worth noting that the IVF credit specifically references Section 213(d) of the tax code, which lays out what counts as a deductible medical expense. This means it’s crucial to check those definitions to see exactly what's covered.

Looking Ahead

By boosting the adoption credit and creating a new one for IVF, this bill could make a real difference for families' bottom lines. It directly addresses the high costs associated with both adoption and fertility treatments. While the specifics of the IVF credit's coverage will depend on existing IRS definitions of medical care, the overall intent is clear: to provide some much-needed financial relief to those building their families.