Temporary custody of newborn

[ranilyn]

To confirm, I was granted temporary custody of a newborn upon birth in August, while we wait for adoption finalization in 2024. Since I was granted temporary custody,  and she is a newborn that has been with me since her DOB in August,  I can claim her as a dependent for this year?

[Opus 17]

If the placement was by a state agency, or another foster care or adoption agency that is approved by the state (or the court) then yes, a legally placed foster child is treated the same as a biological child and you can claim them as a dependent.  Make sure in Turbotax you indicate they lived with you "all year" which is the correct answer for a newborn.  If you only indicate 5 months in turbotax, the program won't think the child is eligible.

However, if this was a private placement, and the state or courts were not involved, then the answer is no.  

[rjs]

It appears that you can claim her as a dependent. You will need a Social Security Number (SSN) or an Adoption Taxpayer Identification Number (ATIN) for her. The IRS Instructions for Form 1040 say the following.

"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."

"Adoption taxpayer identification numbers (ATINs). If you have a dependent who was placed with you for legal adoption and you don't know the dependent's SSN, you must get an ATIN for the dependent from the IRS. See Form W-7A for details. If the dependent isn't a U.S. citizen or resident alien, apply for an ITIN instead using Form W-7."

[Opus 17]

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@rjs wrote:

It appears that you can claim her as a dependent. You will need a Social Security Number (SSN) or an Adoption Taxpayer Identification Number (ATIN) for her. The IRS Instructions for Form 1040 say the following.

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Good point.  Further to the above, if the child is eligible for an SSN, don't file your tax return until you have it.  If you won't get the SSN until after April 15, file an extension request to extend filing the deadline to October 15.   If you file early without listing the child because you are waiting for the SSN, and then amend later when the SSN arrives, you may be denied certain tax benefits.  You need to include the child and their SSN on an original and on-time tax return (on-time includes approved extensions). 

[NCperson]

@ranilynthe issue @Opus 17 is alluding to is that to be eligible for the child tax credit, Baby's social security number must be ISSUED prior to the tax deadline, which is April 15, 2024.  if you are not going to have that number issued by that date, file for an EXTENTION which will give you 6 more months to obtain the SSN.  

if the SSN issue date is after the filing deadline, you are not eligible for the child tax credit (or EITC). 

[Opus 17]

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@NCperson wrote:

@ranilynthe issue @Opus 17 is alluding to is that to be eligible for the child tax credit, Baby's social security number must be ISSUED prior to the tax deadline, which is April 15, 2024. 

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The SSN must be issued by the deadline including extensions to obtain those benefits. That's why the taxpayer needs to obtain an extension before April 15 if the SSN is not available by then.