I've been cheating on Blogger with Facebook recently, so I apologize for my lapse in meaty posts. I don't feel too bad about that, though, because I know a lot of you are on the FB bandwagon, too. It's digital crack, people! So that, combined with the fact that I sometimes don't speak to another adult all day, and thus my brainpower is zapped, and I'm seriously becoming less coherent. Enter Exhibit
A and
B (Which, btw, I still say that while she's off her rocker, there are some double standards playing out. For example, I imagine there are hundreds of parents who are allowed to take their kids
home from the hospital when they have no business doing so. Can you say "Foster Care System?")
But I digress. I really DO have actual information to pass on.
Last year at tax time, Tim and I chatted about the federal
adoption tax credit at length. Excluding our travel expenses, the credit would essentially allow us to recoup most of our adoption fees. We could pay off some debt and still have money leftover to stash away for a down payment on a new, larger house or perhaps even jump start our second adoption.
Tax time this year was a much more somber date with reality.
From our assessment of the laws and our dear tax advisor (TurboTax)*, we learned that you cannot claim the adoption tax credit unless your child was a US citizen and the adoption was final during that tax year. And since Nigel (and most children who are adopted from Ethiopia) came home with an
IR4 Visa, he came home as a legal resident (he carries his green card in the back pocket of his onesie, yo). Now, this in and of itself is not a huge issue if your state has a speedy readoption process or you came home with your child at the beginning of the year, giving you plenty of time to complete said readoption. However, our state (Virginia) takes a while so Nigel's still not yet a US citizen, meaning we were not able to claim the adoption tax credit this year.
Boo... Hiss! However, next year we're able to claim it on expenses already paid. So all will be righted.... just not right NOW. You know, when we're scraping by and counting pennies.
Additionally, because Nigel wasn't a US citizen at tax time, he didn't have a Social Security number, which is now required when you claim a dependent. So, we had to send off for an
Adoption Tax Identification Number, which acts like a temporary SSN. We found this out as we were trying to file our taxes, but fortunately the IRS was quite speedy with our request for the ATIN and we were able to file in a reasonable time.
So, if your child has come home or is coming home in 2009 and you're counting on the adoption tax credit for the 2009 tax season, consider the type of Visa that your child will come home with, the time of year that your child comes home and your state's readoption process. I guess the timeless lesson here is: You can never have too much money saved away! - Sarah
***Disclaimer: Obviously you might want to consult your own tax pro. Because while I think Tim and I are a pretty smart duo, we're not the IRS.