[beav]

our daughter was born Oct 6 2006 and went into foster care until termination of parental rights and was placed with us on Nov 14 2006. Can we clain her as a deduction on our taxes??? We are getting mixed messages. Some say we can and others have told us that she has to live with us 6 months of that year in order to claim her. Our agency has not been much help as they say they don;'t deal with tax stuff and our accountant has never done an adoption on taxes so we are getting no where!!!
Is there anyone out there that knows the correct answer???
It seems crazy not to be able to clain her because we paid all her expenses at placement!
Thanks for your help

[gigigeorge]

if it is an adoption the 6 months does not apply. Our son was placed with us dec 14th and we claimed him for that year. My sisters had her son on dec 31st and claimed him for the whole year.

g/

[StorkWatcher]

With our son, we could not claim until after finalization (which happened in January following the year he was born and placed with us).

Have you finalized?

[Nevada Jen]

I believe you can claim your child for the year she was born as a tax deduction. It is only if your child was in state sponsered foster care that the 6 month rule applies.

[ocracoke]

I was able to get the adoption tax credit this year because the adoption was finalized. But I was not able to get her day care costs because I did not have her for more then 6 months of the year. Next year I will get the rollover tax credit and be able to fully claim her since I have her the full year.

It doesn't seem fair but that is what my tax person is telling me.
Samantha

[mrsdatabits]

I, too, believe you *should* be able to claim her as a dependent. Like a previous poster mentioned, you are able to claim children born on Dec. 31st. I think as long as your child has been placed with you for the purpose of adoption you can claim the dependency, but don't quote me. I don't think you'll be able to claim the adoption tax credit, though, unless the adoption was finalized before the end of the year (but please don't quote me as I don't know all the ins and outs of the credit myself!).

[gigigeorge]

Our son was placed with us in dec 2004 (also the year in which we had all our expenses) we claimed him as a dependant AND we claimed all our expenses. Our adoption was not finalized until 2005. We did it this way based on countless conversations with CPA's, Tax Attorneys and my aunt who works for the IRS. But everyone had a different opinion on what the law actually is. Recently a friend who adopted stated that she had been claiming their adoption expenses since they started the process 3 years ago and not until 2006 did they have a placement.

so in the end, talk to a professional and decide what's best for your situation.

g.

[joskids]

If your child was placed with you as an adoptive placement, you can claim him/her just as if she was born to you, even on December 31st. If he/she was PLACED as a foster child and no adoptive placement agreement was signed, then you cannot. I assume you can, from what you are saying.

Josie

[shortlittlemama]

Just to further clarify, as we just got clear answers today from IRS- sounds as though you will be in similar boat to us. We will be claiming him as a dependent for the child tax credit (they counted our daycare too). However, the Adoption Tax Credit (not to be confused with child tax credit) can only be claimed for 2006 if the adoption was finalized in 2006; otherwise you have to wait until next year. Considering we paid all the big $ when we were matched (he was a day old) back in May, and we had to take out a big loan to cover it- and then had to put a good chunk on a credit card to cover an unexpected surgery after bringing him home- we are going to be hardpressed for money this year. I think it is ridiculous that you can prove you have put out the nonrefundable expense money, but have to wait a year to claim it, when they know you'll be claiming it no matter what (heaven forbid a failed situation).
FYI- if you call the IRS hotline, make sure to express a thousand times you are asking about claiming the child for 2006, not whether you are eligible. That seems to be a common misunderstanding with them- 2 people gave us the impression we could claim it this year before a 3rd clarified that she was only telling us we were eligible to claim period, but not this year.

[georgiagirl]

You could raise your exemptions on your withholding form so that you are taking home more in your paycheck each pay period which will result in less taxes paid in. You will have the money in smaller amounts, but you could begin to pay back some of the cc and loan amounts. Discuss with your tax advisor.

[mj77]

When we talked with the IRS last year (I know some laws change) we were told we couldn't--even with our son being a legal freed adoptive placement, claim him with out qualifying under the 6 mo. rule. We were able to last year but this year's taxes we could get the credit since we finalized in '06.