[mhart_sf]

I am sure this has been answered but I am confused. We brought our child home in September. WE are currently going through the re-adoption phase. This will not be complete until 2006 (early).

So question, can we take the credit on 2005 or 2006 tax returns .........

Many thanks
Miranda

[Stace33]

Bumping....I have the exact same question!

Stacie

[huganangel]

If your state requires readoption (most do), then you can take the adoption credit starting in the year the readoption is complete, in your case 2006. I say "starting" because you have up to 5 years to take the credit limit. Your first year of claim should be the year the readoption is complete. I brought my daughter home in 2004 but did not complete the readoption until 2005 (slow MA courts!). I am not liable for $10,000 of taxes per year so I will take what I can this next tax season and then take the rest for the 2006 fiscal year. Hope this helps!

[lotterino]

It depends on the the visa you came home on. If you came home IR-3, then yes you can take the credit this year. If you came home IR-4 (like us) then you cannot take the credit until the adoption is recognized as finalized by the state you live in. For us that meant readopting. For others you can do a recognition of foreign adoption or a domestication. We did not have time to readopt before the end of the year last year so we could not take the credit on our 2004 taxes. Since the readoption was complete in October, we can take the credit this year 2005.

[mhart_sf]

Thanks so much. For clarification does CA require re-adoption? Looks like it is 2006 for us which acutally works out better.

Thanks
Miranda

[mhart_sf]

Also I just lifted this from the gov site which absolutley backs up the info posted here - again thanks everyone.

When adoption is final. When the adoption becomes final depends on the type of immediate relative (IR) visa under which the child enters the United States.

• IR-3 visa. The adoption of a child who enters the United States on an IR-3 visa is treated as final in the year the competent authority enters a decree of adoption. The competent authority is the court or other governmental agency of the foreign country that has jurisdiction and authority to make decisions in matters of child welfare, including adoption.
  
• Other IR visas. The adoption of a child who enters the United States on an IR visa other than an IR-3 visa is treated as final in the year in which a court of the state in which the child and parents reside enters a decree of adoption, re-adoption, or otherwise recognizes the adoption decree of the foreign country.
  

[becky]

Many people get confused when they read that their state recognizes adoption abroad as full and final (even with an IR4)...that is true that many do...but even in those situations you typically still have to do some type of formal 'recognition or domestication' process before your child is considered a citizen.

[Slatond10]

always boggles my mind!

But thanks for asking the questions and the knowledgeable responses. I believe I understand it.

[deneen]

On re-adoption and foreign decree recognition - I went and Googled this tidbit and came up with this summary of states provisions:

http://naic.acf.hhs.gov/general/lega...ernational.pdf

It may or may not be of use to you! We don't even have our little one home yet but I just started investigating and my head now hurts ....

[Janette Monteil]

If you are an IR3 visa yes you can take it. (look in the passport for the IR3 stamp)

If baby came home on an IR4 visa and the re-adoption is not going to be complete this year then NO you may not take it until next year.

[Janette Monteil]

CA does not require readoption for an IR3 visa.

2 from CA

[DaughterBound]

It looks like in CA, where you live, you will have to do the readopt before getting tax credits, but here in MO foreign adoptions are completely recognized, so I get to take mine this year! Yay! I will still have to go through the readoption process in order to get a valid SS# and US BC.

[becky]

But remember...even if your state is one that recognizes a foreign adoption you still MUST go through the official 'recognition process' for your state before you can claim the credit.

Many families claiming the credit have been audited in the last several years....be sure you are following the advice of your accountant/tax advisor so you don't get yourself into trouble!

[DaughterBound]

2 years ago my friend's adoption came out of PGN Dec. 27 and they got to claim it that year here in MO!! Is that bad?

[becky]

If you have an IR3 Visa you can certainly claim the credit in the year the adoption is final even if that is December 31st. But if you come home with an IR4 you really need to check...

Again...each state has their own laws and you need to check with someone in your home state...attorney, tax advisor, accountant...