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William Perez

When are Foreign Adoptions Considered Final?

By October 5, 2010

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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.

October 5, 2010 at 2:37 pm
(1) Rebecca says:

My husband and I completed 4 international adoptions with the adoptions being final in 2005, 2007 and 2009. We have had no tax liability so we have been carrying forward the unused portion of each credit forward. Can you tell me if we are eligible for a REFUND of what’s left of the cresdits this year under the new 2010 adoption tax credit provisions? We anticipate once again having no tax liability.

October 5, 2010 at 3:01 pm
(2) Rebecca says:

I think I just found my answer here:
It sounds like we can get a refund of our unused portion! I am cautiously hopeful.
Thanks so much for blogging this. It is by far the most user friendly guide to understanding the new credit and of course I still had a question.
Thanks so much.

December 21, 2010 at 9:55 pm
(3) Jonathan Cernero says:

My wife and I just brought home our children from Africa on Thanksgiving 2010. Our Indiana State hearing isn’t until January 11, 2011. Do I have to wait till 2012? We need some financial help?

January 26, 2011 at 9:29 pm
(4) Tina says:

My sister & husband adopted a daughter through the state in 2008 and it was finalized in 2009. They did not take the adoption credit on their tax return because they said they had no out of pocket expense because the state paid for everything. Could they still take the adoption credit and get the refund?

April 3, 2011 at 2:29 am
(5) jennifer says:

only if the child has special needs and its documented by the state you live in. Otherwise, you would have to have adoption expenses to claim. Hope this helps

February 1, 2011 at 11:22 am
(6) Alicia says:

I adopted my 2 special needs children from the state late 2009 and did not use any of the credit on my taxes that year, i also did not have any out of pocket expenses as the state paid for everything. Can i still a refund from the credit?

February 4, 2011 at 11:59 pm
(7) Heather says:

What is considered SPECIAL NEEDS?
I’ve seen some refer to adopting an African American/Black child as Special needs?
Is this true? Or is special needs more in depth?

February 19, 2011 at 11:36 am
(8) liz jackson says:

what was the answer to your question?

February 24, 2011 at 3:42 am
(9) MS CHRIS says:


February 24, 2011 at 7:31 pm
(10) a. beaverhausen says:

Ms Chris…YOU are the idiot! What a nasty comment for you to make…DUH! Heather is right. A member of a minority group may be considered special needs. (You have to check your states specific guidelines) My 4 adopted children are considered special needs b/c they were a sibling group and considered harder to place. I used to work as an adoption social worker so I, unlike you know what I’m talking about.

March 12, 2011 at 11:30 pm
(11) Robin says:

I claimed the Adoption Tax Credit, and just saw my bank account had a refund but not nearly the amount I am expecting. Does anyone know if the refunds (or credits) are issued in separate increments, and the rest of the money will arrive at a later date?

March 16, 2011 at 5:06 pm
(12) A. says:

Robin- I have the same issue with the IRS. I got refunded only what I would have without the adoption credit. When I checked the IRS’ “where’s my refund” online and when I called, I got the same answer: that I will receive a letter telling what more documentation I will need and that I’ll have 30 days to send that information. I have been waiting a week and so far, no letter. Please post and let me know what happens if you get a letter from the IRS (or anyone else in this situation). Very frustrating; it seems like they should have told us what all to include up front, so it wouldn’t take this extra time and mailing expense!

March 25, 2011 at 12:44 pm
(13) Stephanie says:

I received the exact same thing on my “where’s my refund status.” I have not recieved a letter either. It is very frustrating and I just need to know what to expect and what type of documentation they are requesting. If I recieve my letter I will post the request…Waiting to see if and when I will recieve it

July 1, 2011 at 10:12 pm
(14) newdad says:

you will send adoption decree,new birth certificate,child’s s.s.n. and what ever else they require.this will speed things up a bit.

March 25, 2011 at 1:22 pm
(15) Stephanie says:

I just called the IRS to ask quesitons regarding the refund status I have recieved. The representative informed me that my return is being audited because of the adoption credits. It was sent for a review yesterday. The department that completes audits has 90 days to review it. So, what this means is that it can sit in their inbox for up to 90 days before they decide to do anything. She also advised me that they may review it and not need any additional information. If this occurs they will process the refund request. If a letter is not recieved within 90 days I can contact the IRS and they will then have 30 days to produce a letter. Not the answer I was looking for but hope this helps!

April 12, 2011 at 5:40 pm
(16) mel says:

Special needs is also sibling groups

May 17, 2011 at 11:17 am
(17) T says:

In WA state they consider kids 6 and over special needs kids because they are harder to place.

December 27, 2011 at 4:12 pm
(18) Vera says:

our international adoption is considered finalized in 2010.

We have allowable adoption expenses of $13,000 spent in 2009, which we had not claimd in 2009 tax return.

We had $13,170 allowable adoption expenses in 2010 which we did claim in our 2010 tax return.

In order to claim the 2009 tax credit should we file an amended 2009 tax return or forward the unreimbursed credits to our 2011 tax return?

December 29, 2011 at 12:05 pm
(19) erica says:

What about non-hague countries? If a single person sees the children and goes to court and has a final court decree dated 2011 from the non-Hauge country but is still waiting for an Embassy date come the end of 2011 can she take the credit for the 2011 tax year?

January 8, 2012 at 3:09 pm
(20) E. Fitch says:

I have the same question as Erica. Adopted in 12/2011 but don’t bring home the child until 1/2012. 2012 is when we will get the I-3 Visa. Also a non-Hague country.

April 12, 2012 at 1:45 pm
(21) MSR says:

We are also dealing with the IRS on the tax credit for an adoption finalized in 2011, 2012 domestically. The agent I spoke to said that they are looking at EVERY adoption tax credit that is applied for to ensure validity. The fed’s decide special need cases, apparently congenital birth defects are not an automatic qualifier.

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