E-File Adoption Tax Credit

YES!!!!!!! I was getting all grumpy about having to paper file this year!!!!! THANK YOU for posting this!!!

No problem! My excitement has turned sour because on preliminary numbers I've run, the ATC wont matter this year anyway as we dont have tax liability. Wish it would be refundable again.

Dumb question--we didn't pay anything for our adoption. Reading this, do we get to claim a credit only if the child is "special needs"? Is this just that they got the subsidy? It says special needs means "The state has determined that the child will not be adopted unless assistance is provided to the adoptive parents." But ours was a kinship foster adoption, so its not like they put him on the open market...

It does mean special needs as in you receive an adoption subsidy, even if that is only Medicaid. Rules are different in different states so the only requirement for the IRS is that your state considers it special needs. You would have some paperwork from the state re: the identified special needs if this were the case.

Yep. I don't know of a single state that gives subsidy to non-special needs kids, but maybe there are? So, in general, if you get subsidy, even just medical, you qualify for the ATC. You save your subsidy award letter for audit purposes.

Yes, subsidy equals "special needs". They do not actually have to have a medical special need. My son has none and was considered special needs (i.e., getting a subsidy) because he has minority status. And I got the full refundable credit in 2010. Not sure how the law has changed. Also, don't believe every accountant. Most know nothng about this and I almost missed out on this credit because my accountant said I was not eligible. They were wrong! (I have a new accountant now).

In California, every child adopted out of foster care is considered "special needs." So, even though Sweet Pea was an infant when she came to us, and a healthy white child...we still get an adoption subsidy as well as medical.

Same in Fl. We have a paper that shows he is "special needs" the AW pointed it out to make sure we knew.

We weren't sure if we could claim Baby Girl's adoption on our 2012 taxes. Does anyone know if we can claim her this year? Or did we just miss out?

You adopted her (the legal, final adoption) in 2012? Then you need to go back and amend your 2012 taxes. None of the foster care rules apply to you once you have adopted her - you are her parent, and as such you can claim her. On the 2012 taxes, you claim her as your dependent, and you start the forms for the federal adoption tax credit. You can't just start from 2013, because the IRS requires that you claim things in the year they happen. Hope that helps!