HB487 Alabama 2022 Session

Summary

Primary Sponsor

Ginny ShaverRepresentative

Republican

Session

Regular Session 2022

Title

Tax credits, adoption, expands eligibility and increases amount of tax credit for adoption, Secs. 40-18-360, 40-18-361 am'd.

Summary

HB487 expands and streamlines Alabama's adoption tax credit, with higher amounts for resident private or foster adoptions and reduced amounts for out-of-state or nonresident adoptions, plus a new schedule through 2028.

What This Bill Does

The bill creates and adjusts a refundable income tax credit for adopting a child. In 2022, the credit is $1,000 per child for private adoptions or adoptions of qualified foster children. For 2023–2027, the credit is $2,000 per child if the adopted child is a resident of Alabama, or $1,000 if the child is not a resident or is adopted out-of-state. Beginning in 2028 and onward, the credit becomes $1,000 per child. The bill also disallows the credit for adoptions of a spouse’s child and defines key terms like private adoption, out-of-state adoption, and qualified foster child. The credit is claimed in the year the adoption becomes final and is refundable. The act becomes law after the governor signs it and a specified effective date.

Who It Affects

• Alabama taxpayers who adopt a child through private adoption or the adoption of a qualified foster child, with eligibility and credit amount depending on whether the child is Alabama-resident.
• Adoptive parents who adopt an out-of-state or nonresident child, who receive a reduced credit amount compared to Alabama-resident adoptions.
• People who adopt a child who is the spouse’s child will not receive the adoption tax credit.
• Definitions and administration are affected: taxpayers, the Alabama Department of Revenue, and related adoption definitions (private adoption, out-of-state adoption, qualified foster child).

Key Provisions

• §40-18-360 defines terms: out-of-state adoption, private adoption, and qualified foster child.
• §40-18-361 sets the credit amounts and timing: 2022 credit of $1,000 per child; 2023–2027 credit of $2,000 per child if the child is Alabama resident or $1,000 if the child is not Alabama resident/out-of-state; 2028 onward credit of $1,000 per child; credit claimed the year adoption becomes final; credit is refundable.
• The bill disallows the credit for adoptions of a spouse’s child.
• The act becomes effective on the first day of the third month after passage and governor approval.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Tax Credits