The date that parents finalize an adoption is crucial in determining when they can claim adoption related expenses for the adoption tax credit. The IRS has issued new guidance in Revenue Procedure 2010-31 concerning when adoptions of foreign nationals are considered final.
For adoptions from a Hague Convention country and finalized in the foreign country, the adoption is considered final for tax purposes when the sending country enters a final decree of adoption or the State Department issues a certificate.
Foreign adoptions that are finalized in the United States, the adoption is considered final for tax purposes when a state court issues a final decree of adoption.
Taxpayers may amend their 2008 or 2009 returns if their foreign adoption is considered final under these new rules.
More about international adoptions.