Having No S.S. Number (yet) For Adopted Youngster: How To Handle on Tax Returns ?

"Robert11" wrote

Try waiting. The filing date is far enough out that they'll get a SSN for their son before then.

Then in the off chance that it's not here by April 17th, they can file an extension. And wait.

My son and daughter-in-law adopted a baby boy last year.

And if you still don't have it by the extended due date you can file the return, leaving the child off. You'll have three (3) to amend the return and pick up the child and the adoption credit.

Gene E. Utterback, EA, RFC, ABA

You get a really good rate of interest on the refund, better than banks.

Being able to claim the baby also is a huge benefit via the Earned Income Credit.

My wife emigrated to the USA just a few months ago and we got her SSN rather quickly. I think we went to the social security office on a Thursday. They said something to hint that they could have given us a SSN right away if we had asked. About a week later we went to the DMV to get her driving permit, and they wouldn't accept the letter from Social Security, so we drove back to the SS office where they gave us a letter with her SSN on it. Her card arrived about 2 1/2 weeks later.

So you can probably get the number if you go back to the SS office, and if not, the card should arrive pretty soon if there are no hangups.

It's taking around 3 weeks to obtain the card here in New Mexico. Less if you don't wait for the card. You can obtain the number before arrival of the card. The few people that I know from Texas tell me it takes a week.

A friend adopted a few years ago. His adopted child was issued an SSN at birth, but the adoption attorney advised him to obtain a new SSN to ensure all ties were severed with the birth parents. Apparently, this is a common practice.

SNIP

Apparently a temp TIN is possible. Take a look at

Not on an additional refund that results from an amended return.

I've always got a good rate of interest after filing an amended return for a refund.

Before the adoption was finalized, they could have applied for a temporary number on Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions. Given that the adoption has been finalized, the boy is ineligible for this temporary number.

The parents applied for the boy's Social Security Number after the adoption was finalized. Now, they must wait for SSN to be assigned before filing tax returns to claim him as a dependent and to claim other applicable credits. If they'll owe taxes, they'll have to go on extension.

Two additional notes, probably not applicable to this situation:

If the boy were not a citizen nor resident alien, he's not eligible for SSN and wouldn't apply for ATIN. Instead, the parents would have to apply for on Form W-7, Application for IRS Individual Taxpayer Identification Number. ITIN is assigned to a foreign national for tax purposes only who isn't eligible for SSN. It might be necessary if a college fund were being opened for the boy, as an example.

The Earned Income Credit cannot be claimed if the boy doesn't yet have an assigned SSN. To claim EIC after SSN is assigned, an amended return must be filed. With ATIN assigned before SSN is assigned, the boy could be claimed as a dependent, and if eligible, the child care credit, the adoption, and the child tax credit may be claimed.

Bill

I don't think that's right. Amended returns of all shapes and sizes seem to trigger interest.

One exception, that is, an amended return that doesn't trigger interest, is an amended return that is filed because of an NOL carryback. Interest is only paid on that return if the IRS takes too long to process the refund after the amended return is filed.

Ira Smilovitz Leonia, NJ

The "big," refundable tax credit is for a special needs child. A letter certifying that status must be obtained from the appropriate adoption authority and a copy must be attached to the tax return.

A return claiming an adoption credit cannot be e-filed.

Regards, Bill

Thanks for the correction. I guess I've never amended a return where I got money back.

Universally not true. If the IRS takes more than 60 days to process it (or

There's also a statute about it.

BEGIN QUOTE IRC 6611

(a) Rate Interest shall be allowed and paid upon any overpayment in respect of any internal revenue tax at the overpayment rate established under section 6621.

END QUOTE

That same sections disallows interest on late filed returns, incomprehensible language that appears to disallow interest on NOL, FTC carryback, and other credit carrybacks (like I imagine the first time homebuyers credit), a 45 or 180 day rule that no interest if amended return filed 45 or 180 days after original return, limiting the refund if it was initiated by the IRS, etc.

IRC 6621 defines the rates

BEGIN QUOTE

(a) General rule (1) Overpayment rate The overpayment rate established under this section shall be the sum of ? (A) the Federal short-term rate determined under subsection (b), plus (B) 3 percentage points (2 percentage points in the case of a corporation). To the extent that an overpayment of tax by a corporation for any taxable period (as defined in subsection (c)(3), applied by substituting ?overpayment? for ?underpayment?) exceeds $10,000, subparagraph (B) shall be applied by substituting ?0.5 percentage point? for ?2 percentage points?. (2) Underpayment rate The underpayment rate established under this section shall be the sum of? (A) the Federal short-term rate determined under subsection (b), plus (B) 3 percentage points.

END QUOTE

The long term rate is already better than any bank interest, and to that they add 3%. Am I reading something wrong here?