Internal Revenue Code – Section 137

Sec. 137. Adoption assistance programs

-STATUTE-

(a) Exclusion

(1) In general

Gross income of an employee does not include amounts paid or

expenses incurred by the employer for qualified adoption expenses

in connection with the adoption of a child by an employee if such

amounts are furnished pursuant to an adoption assistance program.

(2) $13,170 exclusion for adoption of child with special needs

regardless of expenses

In the case of an adoption of a child with special needs which

becomes final during a taxable year, the qualified adoption

expenses with respect to such adoption for such year shall be

increased by an amount equal to the excess (if any) of $13,170

over the actual aggregate qualified adoption expenses with

respect to such adoption during such taxable year and all prior

taxable years.

(b) Limitations

(1) Dollar limitation

The aggregate of the amounts paid or expenses incurred which

may be taken into account under subsection (a) for all taxable

years with respect to the adoption of a child by the taxpayer

shall not exceed $13,170.

(2) Income limitation

The amount excludable from gross income under subsection (a)

for any taxable year shall be reduced (but not below zero) by an

amount which bears the same ratio to the amount so excludable

(determined without regard to this paragraph but with regard to

paragraph (1)) as -

(A) the amount (if any) by which the taxpayer's adjusted

gross income exceeds $150,000, bears to

(B) $40,000.

(3) Determination of adjusted gross income

For purposes of paragraph (2), adjusted gross income shall be

determined -

(A) without regard to this section and sections 199, 221,

222, 911, 931, and 933, and

(B) after the application of sections 86, 135, 219, and 469.

(c) Adoption assistance program

For purposes of this section, an adoption assistance program is a

separate written plan of an employer for the exclusive benefit of

such employer's employees -

(1) under which the employer provides such employees with

adoption assistance, and

(2) which meets requirements similar to the requirements of

paragraphs (2), (3), (5), and (6) of section 127(b).

 

An adoption reimbursement program operated under section 1052 of

title 10, United States Code (relating to armed forces) or section

514 of title 14, United States Code (relating to members of the

Coast Guard) shall be treated as an adoption assistance program for

purposes of this section.

(d) Qualified adoption expenses

For purposes of this section, the term "qualified adoption

expenses" has the meaning given such term by section 36C(d)

(determined without regard to reimbursements under this section).

(e) Certain rules to apply

Rules similar to the rules of subsections (e), (f), and (g) of

section 36C shall apply for purposes of this section.

(f) Adjustments for inflation

(1) Dollar limitations

In the case of a taxable year beginning after December 31,

2010, each of the dollar amounts in subsections (a)(2) and (b)(1)

shall be increased by an amount equal to -

(A) such dollar amount, multiplied by

(B) the cost-of-living adjustment determined under section

1(f)(3) for the calendar year in which the taxable year begins,

determined by substituting "calendar year 2009" for "calendar

year 1992" in subparagraph (B) thereof.

 

If any amount as increased under the preceding sentence is not a

multiple of $10, such amount shall be rounded to the nearest

multiple of $10.

(2) Income limitation

In the case of a taxable year beginning after December 31,

2002, the dollar amount in subsection (b)(2)(A) shall be

increased by an amount equal to -

(A) such dollar amount, multiplied by

(B) the cost-of-living adjustment determined under section

1(f)(3) for the calendar year in which the taxable year begins,

determined by substituting "calendar year 2001" for "calendar

year 1992" in subparagraph (!1) thereof.

 

 

If any amount as increased under the preceding sentence is not a

multiple of $10, such amount shall be rounded to the nearest

multiple of $10.

 

-SOURCE-

(Added Pub. L. 104-188, title I, Sec. 1807(b), Aug. 20, 1996, 110

Stat. 1901; amended Pub. L. 105-34, title XVI, Sec. 1601(h)(2)(C),

Aug. 5, 1997, 111 Stat. 1092; Pub. L. 105-277, div. J, title IV,

Sec. 4003(a)(2)(C), Oct. 21, 1998, 112 Stat. 2681-908; Pub. L. 107-

16, title II, Sec. 202(a)(2), (b)(1)(B), (2)(B), (d)(2), (e)(2),

title IV, Sec. 431(c)(1), June 7, 2001, 115 Stat. 47, 48, 68; Pub.

L. 107-147, title IV, Secs. 411(c)(2), 418(a)(2), Mar. 9, 2002, 116

Stat. 45, 57; Pub. L. 108-311, title IV, Sec. 403(e), Oct. 4, 2004,

118 Stat. 1188; Pub. L. 108-357, title I, Sec. 102(d)(1), Oct. 22,

2004, 118 Stat. 1428; Pub. L. 111-148, title X, Sec. 10909(a)(2),

(b)(2)(J), (c), Mar. 23, 2010, 124 Stat. 1022, 1023; Pub. L. 111-

312, title I, Sec. 101(b)(1), Dec. 17, 2010, 124 Stat. 3298.)

 

 

-STATAMEND-

INFLATION ADJUSTED ITEMS FOR CERTAIN YEARS

For inflation adjustment of certain items in this section, see

Revenue Procedures listed in a table under section 1 of this title.

 

AMENDMENT OF SECTION

For termination of amendment by section 10909(c) of Pub. L. 111-

148, see Effective and Termination Dates of 2010 Amendment note

below.

For termination of amendment by section 901 of Pub. L. 107-16,

see Effective and Termination Dates of 2001 Amendment note below.

 

 

-MISC1-

PRIOR PROVISIONS

A prior section 137 was renumbered section 140 of this title.

 

AMENDMENTS

2010 - Subsec. (a)(2). Pub. L. 111-148, Sec. 10909(a)(2)(B), (c),

as amended by Pub. L. 111-312, temporarily substituted "$13,170"

for "$10,000" in heading and text. See Effective and Termination

Dates of 2010 Amendment note below.

Subsec. (b)(1). Pub. L. 111-148, Sec. 10909(a)(2)(A), (c), as

amended by Pub. L. 111-312, temporarily substituted "$13,170" for

"$10,000". See Effective and Termination Dates of 2010 Amendment

note below.

Subsec. (d). Pub. L. 111-148, Sec. 10909(b)(2)(J)(i), (c), as

amended by Pub. L. 111-312, temporarily substituted "section

36C(d)" for "section 23(d)". See Effective and Termination Dates of

2010 Amendment note below.

Subsec. (e). Pub. L. 111-148, Sec. 10909(b)(2)(J)(ii), (c), as

amended by Pub. L. 111-312, temporarily substituted "section 36C"

for "section 23". See Effective and Termination Dates of 2010

Amendment note below.

Subsec. (f). Pub. L. 111-148, Sec. 10909(a)(2)(C), (c), as

amended by Pub. L. 111-312, temporarily amended subsec. (f)

generally. See Effective and Termination Dates of 2010 Amendment

note below. Prior to amendment subsec. (f) read as follows:

"Adjustments for inflation. - In the case of a taxable year

beginning after December 31, 2002, each of the dollar amounts in

subsection (a)(2) and paragraphs (1) and (2)(A) of subsection (b)

shall be increased by an amount equal to -

"(1) such dollar amount, multiplied by

"(2) the cost-of-living adjustment determined under section

1(f)(3) for the calendar year in which the taxable year begins,

determined by substituting 'calendar year 2001' for 'calendar

year 1992' in subparagraph (B) thereof.

If any amount as increased under the preceding sentence is not a

multiple of $10, such amount shall be rounded to the nearest

multiple of $10."

2004 - Subsec. (b)(1). Pub. L. 108-311 amended directory language

of Pub. L. 107-147, Sec. 411(c)(2)(B). See 2002 Amendment note

below.

Subsec. (b)(3)(A). Pub. L. 108-357 inserted "199," before "221".

2002 - Subsec. (a). Pub. L. 107-147, Sec. 411(c)(2)(A), amended

heading and text of subsec. (a) generally. Prior to amendment, text

read as follows: "Gross income of an employee does not include

amounts paid or expenses incurred by the employer for adoption

expenses in connection with the adoption of a child by an employee

if such amounts are furnished pursuant to an adoption assistance

program. The amount of the exclusion shall be -

"(1) in the case of an adoption of a child other than a child

with special needs, the amount of the qualified adoption expenses

paid or incurred by the taxpayer, and

"(2) in the case of an adoption of a child with special needs,

$10,000."

Subsec. (b)(1). Pub. L. 107-147, Sec. 411(c)(2)(B), as amended by

Pub. L. 108-311, substituted "subsection (a)" for "subsection

(a)(1)".

Subsec. (f). Pub. L. 107-147, Sec. 418(a)(2), inserted at end "If

any amount as increased under the preceding sentence is not a

multiple of $10, such amount shall be rounded to the nearest

multiple of $10."

2001 - Subsec. (a). Pub. L. 107-16, Secs. 202(a)(2), 901,

temporarily reenacted heading without change and amended text

generally. Prior to amendment, text read as follows: "Gross income

of an employee does not include amounts paid or expenses incurred

by the employer for qualified adoption expenses in connection with

the adoption of a child by an employee if such amounts are

furnished pursuant to an adoption assistance program." See

Effective and Termination Dates of 2001 Amendment note below.

Subsec. (b)(1). Pub. L. 107-16, Secs. 202(b)(1)(B), 901,

temporarily substituted "subsection (a)(1)" for "subsection (a)"

and "$10,000" for "$5,000 ($6,000, in the case of a child with

special needs)". See Effective and Termination Dates of 2001

Amendment note below.

Subsec. (b)(2)(A). Pub. L. 107-16, Secs. 202(b)(2)(B), 901,

temporarily substituted "$150,000" for "$75,000". See Effective and

Termination Dates of 2001 Amendment note below.

Subsec. (b)(3)(A). Pub. L. 107-16, Secs. 431(c)(1), 901,

temporarily inserted "222," after "221,". See Effective and

Termination Dates of 2001 Amendment note below.

Subsec. (f). Pub. L. 107-16, Secs. 202(d)(2), (e)(2), 901,

temporarily added subsec. (f) and struck out heading and text of

former subsec. (f). Text read as follows: "This section shall not

apply to amounts paid or expenses incurred after December 31,

2001." See Effective and Termination Dates of 2001 Amendment note

below.

1998 - Subsec. (b)(3)(A). Pub. L. 105-277 inserted "221," after

"and sections".

1997 - Subsec. (b)(1). Pub. L. 105-34 substituted "of the amounts

paid or expenses incurred which may be taken into account" for

"amount excludable from gross income".

 

EFFECTIVE AND TERMINATION DATES OF 2010 AMENDMENT

Amendment by Pub. L. 111-148 terminated applicable to taxable

years beginning after Dec. 31, 2011, and section is amended to read

as if such amendment had never been enacted, see section 10909(c)

of Pub. L. 111-148, set out as a note under section 1 of this

title.

Amendment by Pub. L. 111-148 applicable to taxable years

beginning after Dec. 31, 2009, see section 10909(d) of Pub. L. 111-

148, set out as a note under section 1 of this title.

 

EFFECTIVE DATE OF 2004 AMENDMENTS

Amendment by Pub. L. 108-357 applicable to taxable years

beginning after Dec. 31, 2004, see section 102(e) of Pub. L. 108-

357, set out as a note under section 56 of this title.

Amendment by Pub. L. 108-311 effective as if included in the

provisions of the Job Creation and Worker Assistance Act of 2002,

Pub. L. 107-147, to which such amendment relates, see section

403(f) of Pub. L. 108-311, set out as a note under section 56 of

this title.

 

EFFECTIVE DATE OF 2002 AMENDMENT

Amendment by section 411(c)(2) of Pub. L. 107-147 applicable to

taxable years beginning after Dec. 31, 2002, except that amendment

by section 411(c)(2)(B) applicable to taxable years beginning after

Dec. 31, 2001, see section 411(c)(3) of Pub. L. 107-147, set out as

a note under section 36C of this title.

Amendment by section 418(a)(2) of Pub. L. 107-147 effective as if

included in the provisions of the Economic Growth and Tax Relief

Reconciliation Act of 2001, Pub. L. 107-16, to which such amendment

relates, see section 418(c) of Pub. L. 107-147, set out as a note

under section 21 of this title.

 

EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT

Amendment by section 202(b)(1)(B), (2)(B), (d)(2), (e)(2) of Pub.

L. 107-16 applicable to taxable years beginning after Dec. 31,

2001, see section 202(g)(1) of Pub. L. 107-16, set out as a note

under section 36C of this title.

Amendment by section 202(a)(2) of Pub. L. 107-16 applicable to

taxable years beginning after Dec. 31, 2002, see section 202(g)(2)

of Pub. L. 107-16, set out as a note under section 36C of this

title.

Amendment by section 431(c)(1) of Pub. L. 107-16 applicable to

payments made in taxable years beginning after Dec. 31, 2001, see

section 431(d) of Pub. L. 107-16, set out as a note under section

62 of this title.

Amendment by Pub. L. 107-16 inapplicable to taxable, plan, or

limitation years beginning after Dec. 31, 2012, and the Internal

Revenue Code of 1986 to be applied and administered to such years

as if such amendment had never been enacted, see section 901 of

Pub. L. 107-16, set out as a note under section 1 of this title.

 

EFFECTIVE DATE OF 1998 AMENDMENT

Amendment by Pub. L. 105-277 effective as if included in the

provision of the Taxpayer Relief Act of 1997, Pub. L. 105-34, to

which such amendment relates, see section 4003(l) of Pub. L. 105-

277, set out as a note under section 86 of this title.

 

EFFECTIVE DATE OF 1997 AMENDMENT

Amendment by Pub. L. 105-34 effective as if included in the

provisions of the Small Business Job Protection Act of 1996, Pub.

L. 104-188, to which it relates, see section 1601(j) of Pub. L. 105-

34, set out as a note under section 36C of this title.

 

EFFECTIVE DATE

Section applicable to taxable years beginning after Dec. 31,

1996, see section 1807(e) of Pub. L. 104-188, set out as a note

under section 36C of this title.

 

 

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of authorities, functions, personnel, and assets of

the Coast Guard, including the authorities and functions of the

Secretary of Transportation relating thereto, to the Department of

Homeland Security, and for treatment of related references, see

sections 468(b), 551(d), 552(d), and 557 of Title 6, Domestic

Security, and the Department of Homeland Security Reorganization

Plan of November 25, 2002, as modified, set out as a note under

section 542 of Title 6.

 

-FOOTNOTE-

(!1) So in original. Probably should be followed by "(B)".

 

 

-End-