Report Title:

Adoption; Tax Credit

Description:

Establishes a tax credit for the qualified adoption expenses incurred in efforts to adopt a child. Requires the taxpayer to have an income less than $150,000 to qualify for the credit. Provides that qualified adoption expenses shall have the same meaning as in the Internal Revenue Code. Applies to adoption expenses incurred after December 31, 2002.

THE SENATE

S.B. NO.

786

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to adoption.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235-   Adoption tax credit. (a) There shall be allowed to each taxpayer subject to the taxes imposed by this chapter, an adoption tax credit that shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed. To qualify for the credit, the taxpayer shall have an adjusted gross income of less than $150,000.

(b) The amount of the tax credit shall be equal to the qualified adoption expenses incurred by the taxpayer in efforts to adopt a child; provided that the credit may be claimed for more than one child in a taxable year but shall not exceed $10,000 for each child.

(c) If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of the tax credit may be used as a credit against the taxpayer's income tax liability in subsequent taxable years until exhausted.

(d) Every claim, including amended claims, for a tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

(e) The director of taxation shall prepare any forms that may be necessary to claim a credit under this section. The director may also require the taxpayer to furnish information to ascertain the validity of the claims for credit made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91.

(f) For purposes of this section, "qualified adoption expenses" means the same as in section 23 (with respect to adoption expenses) of the Internal Revenue Code."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act shall take effect on July 1, 2003;

provided that section 1 of this Act shall apply to adoption expenses incurred after December 31, 2002.

INTRODUCED BY:

_____________________________