Adoption Taxpayer Identification Number

Do I Need an Adoption Taxpayer Identification Number?

You must have an IRS-issued identification number for a child if you wish to take any tax deductions and credits the government offers to help reduce the financial burden of raising kids.

You can apply for an Adoption Taxpayer Identification Number (ATIN) if the child has never had an SSN or if the child's SSN is unknown.

You can claim the adopted child on your tax return as a dependent with the ATIN. If you are otherwise eligible, you can also use these tax credits once you have an ATIN:

• Child tax credit
• Child and dependent care credit
• Adoption tax credit

Taking advantage of these tax breaks can save you thousands of dollars. But you can't claim the earned income tax credit with an ATIN. You need a Social Security Number to claim the earned income tax credit.

There's no need for an ATIN if the child already has an SSN. Be sure to ask the birth parents or the adoption agency if they have the child's SSN. The purpose of an ATIN is to serve as a temporary identification number, which expires after two years, with certain exceptions.

Example of a Need for ATIN

Let's say you're in the process of adopting a 5-year-old child named Abigail, whose birth parents abandoned her and who now lives with you. You've tried to determine if Abigail has an SSN but without success. Because you realize that your income tax deadline is fast approaching, you can request an ATIN so that you'll be able to claim the child as a dependent and claim other child-related tax breaks when you file your federal income tax return.

ATIN Requirements

According to the Internal Revenue Service (IRS), certain conditions must be met to get the tax identification number. You can apply for an ATIN if you are adopting and the following requirements are met:

• The child is living in your home
• An authorized agency placed the child in the home
• It's a domestic adoption
• It's an international adoption, and the child has a certificate of citizenship or a permanent resident alien card
• The child lacks a Social Security number
• You cannot obtain a Social Security number for the child from the Social Security Administration (SSA)
• The child can be claimed on your tax return as a dependent

Adoptions That Don't Qualify for an ATIN

An ATIN is used in domestic adoptions and certain international adoptions. Suppose your international adoption does not qualify for an ATIN. In that case, you may consider applying for an Individual Taxpayer Identification Number (ITIN) for the child, which can be done using tax form W-7.

An ITIN differs from an Employer Identification Number (EIN). An EIN is a nine-digit number the IRS issues to businesses for tax purposes.

Claiming the Adoptive Child as a Dependent

If you are uncertain whether you can claim the adoptive child's exemption or child care credit, you can consult "Exemptions and Credit for Child" and "Dependent Care Expenses" in the Form 1040 Instructions.

Applying for an ATIN

To get an ATIN, use tax form W-7A. You will need to provide the child's name, birth information, and the name of the placement agency. Copies of the placement documentation must be submitted with the completed form. The IRS notes that original documents are not needed. It will not return documents.

According to the IRS, it takes four to eight weeks to process your request, so plan ahead by submitting the request early enough to avoid delaying your tax return.

ATIN Expiration

The ATIN expires after two years. Automatic deactivation of the ATIN is necessary because the ATIN is issued for temporary use until a valid SSN for the adopted child can be obtained. It is not a permanent identification number.

The IRS recommends that adoptive parents get an SSN for the child after the adoption is finalized. After the SSN is obtained, the IRS should be notified. The IRS will then deactivate the ATIN.

The IRS will send a reminder 18 months after the taxpayers receive the ATIN. The notice explains that the ATIN expires in six months.

The IRS allows extensions if the ATIN is set to expire before the adoption is completed.

Get Legal Help With Adoption and Taxes

Tax law can be confusing. Because it's easy to make costly tax blunders, it pays to plan carefully to ensure you don't miss out on any available tax breaks for your soon-to-be-adopted child. If you're uncertain whether to apply for an Adoption Taxpayer Identification Number, consider asking the advice of an adoption attorney near you.