1099-M form for Adoptive Parents

I was just on here to post this!This is what it saysNotice to Adoptive Parents (I'm sure one for foster will come as well)

The State of Indiana is required by the Internal Revenue Service to submit an IRS 1099 form for all payments made to venders during the calendar which total at least $600.00. In conjunction with the January 2009 transition of monthly payments for Adoption Assistance from the County Government to the State, and for those participants who qualify, a 1099-M form will be in the mail to you on or before February 1, 2010.

As with any IRS Tax information, it is your responsibility to consult your own Tax Advisor for how this form should be handled for your specific situation as the State can not provide specific tax filing guidance related to your particular financial requirements. DH was looking up the 1099-M form, which is a misc type form. It does not differentiate taxable vs non-taxable that he could find. Therefore, we are guessing this to mean they are going to try to tax the amount paid for the subsidies and foster care per diems. We have not yet consulted anyone for our taxes, but just wanted to put this out there, see what anyone else has heard/seen/thought. Now that they made us vendors...and told us this would NOT be taxable, watch them now say, well, it's not US, it's the IRS requiring this!

Well I may go to Jail because I have already filed my taxes!!!! Did it yesterday. LOVELY!!!! Nice they send something now wish they would have sent something the last 8 years so I would have known this was coming!!! Do not know what to do!

Adoption Assistance Payments as Taxable Income Since 1974, the IRS has ruled that adoptive parents do not normally need to include adoption assistance benefits in their taxable income (see box below for specific IRS language). IRS Publication 17: Your Federal Income Tax Publication 17 has made two references related to the taxability of adoption assistance: Chapter 12: Other Income—Welfare and Other Public Assistance states “do not include in income the benefit payments from a public welfare fund” (p. 84). In 1974, the IRS ruled that adoption assistance benefits were public welfare payments and thus exempt from taxation under this clause. In a previous version of Publication 17, the IRS specifically stated “do not include in your income payments from a state agency to help you care for your adopted child” (p. 67 of the 1986 Publication 17). However, the IRS also says that adoption assistance benefits may be taxable if they exceed the amount an adoptive family spends to support the child. This situation might occur if adoption assistance was a family’s sole source of income. In cases such as this, some of the adoption assistance funds are used to meet the needs of the parent(s), so not all funds are being spent to support the child. NACAC is not aware of any states that have a different definition of taxable income, but parents should consult their tax preparers or a tax advisor about state specific rules. Thought This will hopefully help!!!

I got my letter today as well.. I'm not claiming it as taxable income.. I was waiting on this state to do something like this.. BAD WORDS..

If what you get exceeds what you spend on your children... I want you to tutor me on budgeting. Seriously. My bff's husband is a CPA and he said the only reason you would have to declare it on your taxes is IF you were making a profit.

Interesting. I wonder if they will go after us. Dh is a disabled vet and can't work in his line of work anymore.

Thank you jolconduitt for your post!

dcs.in.gov says: Notice to Adoptive Parents Regarding 1099 In the next few days you will receive a 1099 Misc form from the State of Indiana in regard to the adoption assistance payments you received from the state in 2009. Please note that this form was sent in error and will be corrected. None of the adoption assistan...ce payments you received in ... See More2009 were reported to the IRS as income. You will receive a corrected 1099 form that no longer includes the adoption assistance payments in that report. We sincerely apologize for any inconvenience this has caused you.