Details of Public Law 119-21, section 70403 , One Big Beautiful Bill Act

Under the current adoption credit only a state determines whether a child has special needs.

This provision would allow an Indian tribal government to also make such determination.

California does not conform to IRC section 23, relating to adoption expenses.

California has a standalone adoption credit, which allows a credit equal to 50 percent (not to exceed $2,500) of the cost of adopting a minor child who is an American citizen and is in the custody of a California public agency or a political subdivision of California. The credit is claimed in the taxable year in which the decree or order of adoption is entered, although qualifying costs paid or incurred in prior years can qualify for the credit.