HB487 Summary

• Amends Alabama tax code Sections 40-18-360 and 40-18-361 to expand and increase the adoption tax credit for eligible taxpayers.

• Adds a new definition of "out-of-state adoption" to include adoptions through out-of-state or foreign agencies where the adoptive parents reside in Alabama.

• For tax years 2023-2027, increases the refundable tax credit to $2,000 per child for private adoptions or qualified foster children who are Alabama residents, and $1,000 per child for out-of-state adoptions or non-resident children.

• For tax year 2022 and prior, and for tax years beginning January 1, 2028 and later, maintains a $1,000 per child refundable tax credit for private adoptions and qualified foster child adoptions.

• Clarifies that taxpayers who adopt the child of their spouse are not eligible for the tax credit.