PUBLIC LAW 107-147—MAR. 9, 2002 116 STAT. 45 (b) AMENDMENT RELATED TO SECTION 201 OF THE ACT. — Subparagraph (B) of section 24(d)(1) is amended by striking 26 USC 24. "amount of credit allowed by this section" and inserting "aggregate amount of credits allowed by this subpart". (c) AMENDMENTS RELATED TO SECTION 202 OF THE ACT. — (1) CORRECTIONS TO CREDIT FOR ADOPTION EXPENSES.— (A) Paragraph (1) of section 23(a) is amended to read as follows: "(1) IN GENERAL.—In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter the amount of the qualified adoption expenses paid or incurred by the taxpayer.". (B) Subsection (a) of section 23 is amended by adding at the end the following new paragraph: "(3) $10,000 CREDIT 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 taxpayer shall be treated as having paid during such year qualified adoption expenses with respect to such adoption in an amount equal to the excess (if any) of $10,000 over the aggregate qualified adoption expenses actually paid or incurred by the taxpayer with respect to such adoption during such taxable year and all prior taxable years.". (C) Paragraph (2) of section 23(a) is amended by striking the last sentence. (D) Paragraph (1) of section 23(b) is amended by striking "subsection (a)(1)(A)" and inserting "subsection (a)". (E) Subsection (i) of section 23 is amended by striking "the dollar limitation in subsection (b)(1)" and inserting "the dollar amounts in subsections (a)(3) and (b)(1)". (F) Expenses paid or incurred during any taxable year 26 USC 23 note, beginning before January 1, 2002, may be taken into account in determining the credit under section 23 of the Internal Revenue Code of 1986 only to the extent the aggregate of such expenses does not exceed the applicable limitation under section 23(b)(1) of such Code as in effect on the day before the date of the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001. (2) CORRECTIONS TO EXCLUSION FOR EMPLOYER-PROVIDED ADOPTION ASSISTANCE.— (A) Subsection (a) of section 137 is amended to read as follows: "(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) $10,000 EXCLUSION FOR ADOPTION OF CHILD WITH SPE- CIAL 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 $10,000 over the actual aggregate qualified adoption expenses with respect to such adoption during such taxable year and all prior taxable years.".
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