Families are formed in many ways. One of the most expensive methods is through adoption.
Any adoptive parent will tell you that the price of the process was well worth it. But these moms and dads also are happy that the tax code provides some help via the adoption tax credit.
But federal assistance in covering adoption costs is dwindling. In 2012 this tax credit dropped to $12,650. That's still a lot of money that goes toward a dollar-for-dollar reduction of your tax bill. But it's $710 less than the credit amount available for the 2011 tax year.
More painful, the current adoption tax credit is no longer refundable. That means it can help zero out your tax bill, but you won't get any excess credit back as a tax refund.
And the tax news gets worse for prospective adoptive parents. Unless Congress acts to extend this tax credit, on Jan. 1, 2013, the there will be no adoption tax credit except for special needs children who are adopted within the United States.
Considering that costs for adoption can quickly climb into the mid-five figures, the adoption tax credit could make a difference in future parents' financial family planning.
Do I expect the adoption credit to go away completely? No. Every politician wants to be seen as family-friendly.
But will it be as generous as it was in 2010, 2011 or even 2012? Possibly not.
President Barack Obama's fiscal year 2013 budget includes a proposal to make the adoption tax credit permanent and make it refundable for 2012 retroactively and for 2013.
Congress, however, is fixated on the federal deficit and is constantly looking to squeeze every cent it can out of federal subsidies. And this tax credit is essentially a federal subsidy for families.
Plus, with Congress and the president famously at odds, there is likely a contingent that will oppose this Obama-supported proposal even if they support it.
So if you're in the process of adopting, I suggest you do everything you can to wrap it up in 2012. That way you know for sure what amount of tax credit you'll be able to claim.
And more importantly, you'll have your new son or daughter at home sooner!
Keep up with tax news and tax-cutting tips by subscribing to Bankrate's free Weekly Tax Tip newsletter.
You also can follow me on Twitter @taxtweet.