Adopting Two Girls

Today TaxMama hears from Charlotte in the TaxQuips forum, who tells us. “We adopted my niece’s 2 children this year. But my husband’s Social Security income wasn’t taxed. So how do I get the child income tax credit? or can I? I don’t work.”

Dear Charlotte,

Congratulations on expanding your family.

You say “my husband’s social security income wasn’t taxed federally”? Is that his only source of income? And you didn’t work, right? So you’re saying you have no earned income, right?

You won’t qualify for either the Child Tax Credit or the Additional Child Tax Credit if you have no taxable income whatsoever.

Read IRS Publication 972 for more information – http://www.irs.gov/pub/irs-pdf/p972.pdf, though it really doesn’t explain how your income or lack of it, comes into play.

However, you may qualify for the Adoption Credit – Form 8839, worth up to $12,150 per child. http://www.irs.gov/taxtopics/tc607.html

This is a non-refundable credit – meaning if you have no tax due, you can’t use it. But, I suggest this because you can carry it forward.

That means, if either of you works in 2010, your income will be tax-free because the adoption credit will absorb it. Also, if you have wages in 2010, you will be entitled to the Child Tax Credit, too. After all, with two more people in the house, you may just need a job to support you all!

Enjoy the children!

And remember, you can find answers to all kinds of questions about child tax credits, adoption credits, and other tax issues, free. Where? Where else? At TaxMama.com.

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