Child Tax Credit - Newly Adopted Children

Taxpayers adopted two children (brothers), US citizens, adoption final 12/28/2006. Child 1 was born in 2005 and lived with taxpayers since 12/06/2006. Child 2 was born

1. Is your son, daughter, stepchild, foster child...,

2. Was under age 17 at the end of 2006,

1. Did not provide over half of his or her own support for

1. Lived with you for more than half of 2006 (see Internal Revenue Service exceptions to time lived with you below), and

2. Was a U.S. citizen, a U.S. national, or a resident of the United States. If the child was adopted, see Adopted child below. Adopted child. An adopted child is always treated as your own child. An adopted child includes a child lawfully placed with you for legal adoption. If you are a U.S. citizen or U.S. national and your adopted child lived with you all year as a member of your household in 2006, that child meets condition (5) above to be a qualifying child for the child tax credit. Exceptions to time lived with you. A child is considered to have lived with you for all of 2006 if the child was born or died in 2006 and your home was this child’s home for the entire time he or she was alive. Temporary absences for special circumstances, such as for school, vacation, medical care, military service, or detention in a juvenile facility, count as time lived with you. There are also exceptions for kidnapped children and children of divorced or separated parents. Both children meet qualifying conditions 1, 2, 3 and 5.

Child 2 appears to meet the exception to condition 4 in that "the child was born...in 2006 and your home was this child’s home for the entire time he or she was alive." I can't make Child 1 fit that exception. To the contrary, though the "Adopted child" paragraph appears to apply to non-US citizen adoptees, it may specifically require that the "...adopted child lived with you all year as a member of your household in 2006..." (though this conflicts with the "more than half of 2006" rule in condition 4.) Any agreement or disagreement with my take on this? Any knowledge of rev regs or rules that address the situation and would qualify Child 1 for the credit? TaxAct software disallows the additional child tax credit for both children when correct dates of birth and months living with taxpayers (1 for Child 1, 5 for Child 2) are input. Changing 5 months to 7 or more for Child 2 adds the $1,000 credit. If, in fact, Child 2 qualifies for the credit, it appears the software doesn't take date of birth into account.

>
>
>
>
>
>
>
>
>