An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in tax credit and tax benefit administration, further providing for definitions; and establishing the child adoption tax credit.

PRINTER'S NO. 1294
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 1084
Session of
2025
INTRODUCED BY PENNYCUICK, STEFANO AND BAKER, NOVEMBER 5, 2025
REFERRED TO FINANCE, NOVEMBER 5, 2025
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," in tax credit and tax benefit administration,
further providing for definitions; and establishing the child
adoption tax credit.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definition of "tax credit" in section 1701-
A.1 of the act of March 4, 1971 (P.L.6, No.2), known as the Tax
Reform Code of 1971, is amended to read:
Section 1701-A.1. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
* * *
"Tax credit." A tax credit authorized under any of the
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following:
(1) Article XVII-B.
(2) Article XVII-D.
(3) Article XVII-E.
(4) Article XVII-G.
(5) Article XVII-H.
(6) Article XVII-I.
(7) Article XVII-J.
(8) Article XVII-K.
(8.1) Article XVII-L.
(9) Article XVIII.
(10) Article XVIII-B.
(11) Article XVIII-D.
(12) Article XVIII-E.
(13) Article XVIII-F.
(14) Article XVIII-G.
(14.1) Article XVIII-H.
(15) Article XIX-A.
(15.1) Article XIX-C.
(16) Article XIX-E.
(16.1) Article XIX-F.
(16.2) Article XIX-L.
(17) Section 2010.
(19) Article XX-B of the act of March 10, 1949 (P.L.30,
No.14), known as the Public School Code of 1949.
(20) The act of December 1, 2004 (P.L.1750, No.226),
known as the First Class Cities Economic Development District
Act.
(21) 12 Pa.C.S. Ch. 34 (relating to Infrastructure and
Facilities Improvement Program).
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(22) Any other program established by a law of this
Commonwealth in which a person applies for and receives a
credit against a tax. This paragraph shall not apply to a
credit against a tax liability as a result of an overpayment.
* * *
Section 2. The act is amended by adding an article to read:
ARTICLE XIX-L
CHILD ADOPTION TAX CREDIT
Section 1901-L. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
" Adopted child." A child who:
(1) is adopted by a taxpayer;
(2) at the time of adoption is under 18 years of age;
and
(3) is not the child of the taxpayer's spouse.
"Department." The Department of Revenue of the Commonwealth.
"Resident individual." As defined in section 301(p).
"Tax credit." The child adoption tax credit authorized by
this article.
"Taxable year." As defined in section 301(v).
"Taxpayer." A resident individual subject to tax under
Article III.
Section 1902-L. Child adoption tax credit.
(a) Tax credit available.--A taxpayer is eligible for a tax
credit as provided in subsection (b) against the tax imposed
under Article III if:
(1) The taxpayer adopts a child who at the time of
adoption is under 18 years of age in the taxable year the
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adoption was finalized.
(2) The tax credit is only claimed once per adopted
child by the taxpayer or the taxpayer's spouse in the year
the adoption was finalized. The tax credit may be claimed by
individuals filing jointly.
(b) Maximum tax credit.--A taxpayer may claim a tax credit
in the amount of $1,000 for each adopted child.
(c) Claim of tax credit.--A taxpayer must claim a tax credit
under this article on a return filed under section 330.
Section 1903-L. Forms and regulations.
The department shall establish any form necessary to claim a
tax credit, may require proof of the claim for the tax credit
and may adopt rules and promulgate regulations to administer the
tax credit.
Section 1904-L. Report to General Assembly.
(a) Annual report.--No later than October 15, 2027, and each
October 15 thereafter, the department shall submit a report to
the General Assembly indicating the effectiveness of the tax
credit.
(b) Information required.--The report required under
subsection (a) shall include, but not be limited to, the
following information:
(1) The number of tax credits approved.
(2) The amount of tax credits approved.
(3) The amount of tax credits claimed.
Section 3. This act shall apply to tax years beginning after
December 31, 2025.
Section 4. This act shall take effect immediately.
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