There has been a lot of talk about claiming foster children on taxes. The biggest misconception is that you can not claim your foster child unless they have lived with you for 6 months out of the year; however, there are exceptions. Here is a letter I received from my accountant.
I read through the dependent rules again and I think I know why that person(s) thinks a foster child has to live with you for 6 months before you can claim him as a dependent.
One of the rules for a ‘qualifying’ child (who can be your birth child, or adopted, or foster, or grandchild etc…) is that he/she has to have lived with you for at least 6 months of the year. For example, say a grandchild lives with one set of grandparents for 5 ½ months and the other grandparents for 6 ½ months. He can be claimed as a dependent only by one set of grandparents, the ones who had him more than 6 months. The rule prevents more than one person claiming the same child for the same year.
BUT, there are several exceptions to the 6 month rule for qualifying children, and the exception that applies here is for a child born or died during the year. He is treated as being with you for the whole year, even if he was born on Dec. 31. I think the person who did all the research didn’t read about the exceptions. There is no place in the tax rules that says differently than what I just explained. Now, if the foster child is 5 years old and he came to live with you in Aug., THEN he wouldn’t have been with you for 6 months and you couldn’t claim him as a dependent until the following year.
Little Bit is your dependent for 2007.
Tell your friends about the exception – they can amend their tax returns!!
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The Road
- 1 FSH test showing that I have old eggs which resulted in a nervous break down
- 1 month of clomid which resulted in a major cyst
- 1 IVF attempt that resulted in a broken heart
- Feb. 26th my first foster adopt meeting!
- June 13th renewed faith in my ability to conceive naturally.
4 comments:
Good to know! Maybe some day soon I'll be able to utilize that!!! :) You never know! I'd love another baby baby in the house! :)
The 51% of support test is what gets us. Our FC stipends are relatively high and we have to have receipts to document that we spend more than 2x what they provide us to claim her - that is, even though the stipend isn't taxed, it counts.
That and we can't get her SSN from her CW.
Ah, this is excellent news for many. It worked out for us that our tax liability went to 0 even before we tried to claim Bit-Bit, so ammending wouldn't help - but it is GREAT to know for the future. I don't think many tax professionals are very hip to adoption stuff. It took forever for me to educate myself, and even then I failed to always find the correct answers. It is just amazing.
In that case, I should be able to claim Princess.
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