Advertisements
I have two related questions regarding special needs domestic adoption & taxes.
We are not a low-income family. However, we have previously adopted 4 special needs children internationally, (IE: no tax benefits, no subsidies, etc.) and we were quite "stretched".
When considering a a VERY special needs domestic adoption, we knew we couldn't do it without a substantial subsidy. We asked for & got that subsidy.
Now for the question! :)
1. All of our child's monetary expenses are currently being covered by the subsidy. Can we call this child a dependent for tax purposes? (He is without question our child, legally entrusted to us by the state he is from, & soon to have his adoption finalized.)
2. IF we can NOT call the child a dependent, would we still be eligible to receive the tax credit offered in 2003. He is undeniably special needs & was born & resided(s) in the U.S.
Can anyone give us information on this, or tell us where to FIND the information? It seems that this is not the sort of thing "just any" CPA or tax attorney would readily know.
In our case, the answer determines when we finalize: before the new year or after the new year. Naturally, we'd like to finalize ASAP, but we are so close to the new year, that we would understandably wait if it meant a large tax credit in 2003. With our family, every little bit of help is greatly appreciated!
Thanks so very much for your response!
Like
Share
Ok, I am no expert, but here is my understanding...
-if the care of your child is paid for by you by 51% or greater then you can count them as a dependent (include that childs portion of all the bills in this...mortgage, electricity, food. And of course clothing and other items just for your child count).
-The tax credit, from what I understand, would be available to you provided that your child is finalized in 2003 or later. And I was told that you can claim that credit for the following 5 years until you have reached 10,000 dollars or as close as you can get.
-I would call your local IRS office and ask them to provide you with all the inforamtion they can on the adoption tax credits and declairing a child as a dependent. they also are the ones who are required to answer your questions on these subjects. So you can always call and ask and if they don't know tell them to find out. Don't pay a CPA for that advice. The IRS office is free. (in the past we have had the IRS do our taxes. It is free and I don't worry about an audit. Figure they wouldn't do that when they are the ones who did the taxes in the first place :) )
-I would say finalize after the new year. It isn't that long off and you would be able to get that credit. We are waiting to finalize too so that we can apply for a subsidy for our child who has special needs and was a domestic adoption.
-our agency told us that we can claim our child as a dependent before they are finalized. There is a special form for that. But the IRS office should be able to give you that too.
I wish I had more information. I have just picked up a little here and there along the way. But I thought I may be able to help in the meantime. Maybe someone else has some other information that we can both benifit from. I am in the same boat you are. We are trying to figure out all this tax stuff too.
A
Advertisements