Tax Time: No Social Security Number for your Adopted Child?

With tax season just past us, I received many phone calls from families who had adopted in 2018 but their finalization was not able to be processed before the end of the year. That means that the child was not issued a Social Security Number in time for their tax return. This is hugely significant in terms of claiming the child as a dependent and also obtaining the Adoption Tax Credit.

I also see this when the adoption has been finalized but the child has not yet received the new birth certificate.  Usually, to obtain a social security number, you have to have the new birth certificate and that can take several months and up to a year after the adoption is finalized.

So, for next year, if you adopt, go ahead and obtain an Adoption Tax Identification Number ("ATIN") as soon as the child is placed with you.  Contact the IRS at https://www.irs.gov/. The form you need to fill out is the W-7A: https://www.irs.gov/pub/irs-pdf/fw7a.pdf.  You will need to complete the form, sign it, and mail it with backup documentation:

In general, one of the following documents will satisfy this requirement. A copy of the placement agreement entered into between you and an authorized placement agency. A copy of the document signed by a hospital official authorizing the release of a newborn child from the hospital to you for legal adoption. A copy of the court order or other court document ordering or approving the placement of a child with you for legal adoption. An affidavit signed by the adoption attorney or government official who placed the child with you for legal adoption pursuant to state law. Foreign adoptions. In addition, if you adopt a foreign child with U.S. citizenship or resident alien status, include with your Form W-7A a copy of your child’s: Permanent resident card (green card), Certificate of Citizenship, or Passport with “I-551” stamp

Currently you would file this form with documentation by mailing to:

Department of the Treasury Internal Revenue Service Stop 6182 Austin, TX 73301-0066

However, you should double check the mailing address on the W-7A instructions before you mail it:  https://www.irs.gov/pub/irs-pdf/iw7a.pdf

It can take up to 8 weeks to receive the ATIN so fill the form out ASAP!

The ATIN can be used in lieu of a social security number for up to two years. Once you receive your child's new birth certificate, you can go to the Social Security office nearest you and obtain a Social Security number for your child.  Then, you will swap out the Social Security number for the ATIN the following year.

What if the child you adopted is not a U.S. citizen or lawful permanent resident?  You cannot use this form.  Instead, you will use the Form W-7 and obtain an Individual Tax Identification Number ("ITIN").  The instructions for the ITIN are found here:  https://www.irs.gov/pub/irs-pdf/iw7.pdf.

One key timing difference is that for the ITIN, you cannot file it in advance.  You file it WITH your tax return and you have to use a paper filing for your tax return, not electronic filing.  Read the instructions carefully because, many ITIN applications are rejected for failure to provide the proper documentation.

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