IRS News Release  
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 1996 returns.

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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