February 10, 1997
IRS Offers Special Assistance
for Parents Adopting a Child
WASHINGTON - Thousands of parents in the process of adopting a
child may be eligible for certain tax benefits on their 1996 federal
income tax return, even if they don't have the taxpayer
identification number for the child which Congress has required
because the adoption is not yet final. To assist parents who are
adopting a child comply with newly enacted laws, the Internal
Revenue Service has set up a special temporary procedure to allow
them to claim the dependency exemption or child care credit on their
Many adopting parents often have custody of a child for a
period of time pending final adoption, and they provide enough
financial support during the year to be entitled to claim the
dependency exemption or child care credit on their tax return. The
law requires taxpayers to have valid identification numbers for
their children to be able to claim the exemption or credit --
generally a social security number (SSN), or an Individual Taxpayer
Identification Number (ITIN) in the case of nonresident aliens.
However, parents cannot get an SSN from the Social Security
Administration until after the adoption is final.
Under the temporary procedures the IRS announced today, parents
in the process of a domestic U.S. adoption should write "U.S.
adoption pending" in the exemption section of their 1996 tax return
the child's social security number. In addition, they should
attach a copy of documentation from the adoption agency or other
legal authority to show that the child was placed in the taxpayer's
home for legal adoption.
Internal Revenue Commissioner Margaret Milner Richardson said,
"We are pleased to offer a simple solution to adopting parents so
they can take advantage of the tax benefits relating to dependents
while they wait for the adoption process to be complete."
In the case of a foreign adoption, parents should obtain an
ITIN for their child from the IRS and use it until they can get an
SSN. Parents can use Form W-7 to get an ITIN.
Because recent tax law changes require the use of an SSN to
claim the earned income tax credit (EITC), these special procedures
do not allow adopting parents to claim the EITC for a child placed
with them for adoption. To claim the EITC for a prior year,
however, parents may file an amended return after they obtain an SSN
for their child.
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