[jules17]

I think I know the answers to these, but our accountant is unsure, so I am going to the experts!

I know how the tax credit works...but a few questions.

Is it accurate that IF Sam is not finalized by Dec. 31 of this year, then it has to wait until 2007?

My next question, is final when we have our Embassy appt. or when he gets out of PGN? I would bet the Embassy appt., but just checking...is it when out of PGN or when done with Embassy? Sam will come home on an IR3, if that matters.

I realize that we still have to get his SS#, etc., but I am just wondering how stringent the guidelines are.

I am hoping and praying that Sam will be out soon (wishful thinking, I know!) and would hate for Uncle Sam to be able to hold onto our money for another year.

Sorry if this has already been covered - I did a search but didn't see specifically what I am asking. I feel quite ignorant that I don't already know, but I know you will be gentle with me.

Many thanks and HAPPY HOLIDAYS!

[hunterfamily]

I called the IRS. They said the adoption has to be final. When PGN and the birth mother sign off, it is final. I am not sure about the rest.

[jules17]

Thank you, hunterfamily.

So when he is out of PGN and his birth mother has signed off, that is final? And pink and the Embassy appt, etc., don't figure in to the equation?

Many thanks!

[Guatemomtobe]

Julie,
It is my understanding that the Embassy is just for a visa and not "related" to the adoption finalization process.

There was a post this weekend about the tax credit if you go back a few pages probably.

Susan

[DPline]

For determination of visa status, the Embassy considers 'final' to be when you exit PGN. The birthmother can still change her mind until she has signed the Protocolo after you have exited PGN, so once she has signed, you are legally the child's parents. The Embassy interview is really only for the Visa as Guatemomtobe said.

Now whether the IRS follows the same rules as the Embassy, I don't know, but once the Protocolo is signed, the child is now YOUR child, and the rest is just paperwork, so you can't get more final than that - as least for an IR3.

[Ms.Judi]

Hey Julie,

Give my Mom a call tomorrow. She went to the Library and brought home the info about this.

Judi

[Larue]

Greetings Jules - here's my take based on my research...and of course everyone will give you a different answer

The adoption is final based on when the final adoption decree -- or in our case -- when the "Protocolo" is signed. To be claimed for calendar year 2006 taxes, it has to signed by 12/31/06. And yes you do need a social security number for your child to both claim them as a dependent for 2006, and claim the adoption tax credit. This is relatively easy to do! If the Protocolo is signed after 12/31/06, you will have to wait until you file your taxes for calendar year 2007 to both claim them as a dependent and claim the adoption tax credit!

And you CAN claim your internationally adopted child as a dependent even if they didn't live with you for at least 6 months during the calendar year. Just as you would if you gave birth to them by 11:59 PM and 59 seconds on 12/31/06. The intent of the "6-month residence rule" is to determine among divorced parents who provided at least 6 months of support and can legally claim the child for tax purposes as a dependent. Or in the case of a domestic adoption, if the birth mother had custody of the child for at least 6 months and can claim them as a dependent on their Federal tax return, then the adoptive parents can't. No child can be claimed twice as a dependent.

All I can say is that I'm an Auditor, and I'm about as fiscally conservative as you can get. Ask DH! And this is what I'm planning to do. One thing I would recommend, there are also adoption benefits available in some states - so DO check with a tax professional in your state when you file your taxes for the year your adoption is finalized.

Best wishes

[jules17]

Many thanks!

As usual, you all have been most helpful!

I don't think our accountant is that familiar with IA, so I have to be educated and ready.

Appreciate your help!

[MNStarr]

So, what if we are submitting all the paperwork for SSN this week, but don't get the actual number until January? Is that still ok? Not sure how long it will take to get a number but we are going directly to our Social Security Office.

[jules17]

MNStarr, I think you have until April 15 to get the SS# (well, longer even if you file an extension)...

Someone else will know for sure, but that is the way I understand it!

[Tamiswaiting]

Laura,

Thank-you for your post. That is exactly how I understand the issue, but I kept reading that the child needs to be home earlier than that to claim as a dependent. That made no sense to me because of the fact that you can claim a child who is born on NY Eve. Thanks for the confirmation.

[DPline]

Originally Posted by Tamiswaiting

Laura,

Thank-you for your post. That is exactly how I understand the issue, but I kept reading that the child needs to be home earlier than that to claim as a dependent. That made no sense to me because of the fact that you can claim a child who is born on NY Eve. Thanks for the confirmation.

My daugther came home on Nov. 17, 2004 and we claimed her as a dependent and the IRS hasn't come after us yet.

[Pudding]

Is all of this relative to whether a child comes in on an R4 or R3? Help!!!

Beth

[DD Amasa]

I've also read in the 1040 instructions the child must have lived with you for more than half of the year in order to claim them, the only exception being children who have lived with you since birth are considered having lived with you the entire year for tax purposes. Which is why you can give birth on 12/31 and claim the child. But there is no mention of any exception for adoptions.

I was also told the child does not need a ss number to claim them as a dependent, just a TIN (tax identification number) or ATIN (adoptive child tax identification number).

[Larue]

Greetings - just wanted to add that ATINs only apply to domestic adoptions. Also ITINs are for foreign nationals who are not eligible to obtain a social security number. Here's some excepts from the IRS website:

ATIN - A number issued by the Internal Revenue Service as a temporary taxpayer identification number for the child in a domestic adoption where the adopting taxpayers do not have and/or are unable to obtain the child's Social Security number (SSN). The ATIN is used by the adopting taxpayers on their federal income tax return to identify the child while final domestic adoption is pending.

ITIN - IRS issues ITINs to foreign nationals and others who have federal tax reporting or filing requirements and do not qualify for SSNs. A non-resident alien individual not eligible for an SSN, who is required to file a U.S. tax return only to claim a refund of tax under the provisions of a U.S. tax treaty, needs an ITIN.

Taxes are so fun!