My son is adopted and the adoption is not final. My refund decreased dramatically after inputting his ATIN. Why?

[raleighwrights]

Our adopted son was born in April of 2018 and has lived in our house since then.  No one else can claim him as a dependent and no one has lived in our house to help care for him.  Our refund was a little over $5,000 before I input his ATIN but dropped to around $3,500 once I entered it.  I don't understand why.

Thank you in advance for your time and help.

[Vanessa]

Did he have health insurance all year?

[Vanessa]

Were you getting the Child Tax Credit prior to entering his ITIN?

[raleighwrights]

Yes, he had health insurance all year.  Medicaid for the month of April and then he was added to our insurance as of May 1.  I don't think we were getting the Child Tax Credit prior to entering his ATIN.

[Vanessa]

What is on lines 7-12 of your 1040?  

[raleighwrights]

We're taking the standard deduction and line 12 shows a Child Tax Credit of $500.  I am still working our our return, though; I've not yet entered any of our 2018 charitable giving or adoption expenses for 2017.

[Vanessa · Accepted solution]

Since your son has an ITIN instead of a social security number he is not eligible for certain credits that he would be if he had a SSN that is valid for employment.  One of the credits that is only available with a SSN is the Child Tax Credit. If you are now getting $500, this is because he is eligible for the $500 Other Dependent Credit, but not the $2,000 Child Tax Credit.  They both show on the same line. This is why your refund dropped by $1,500.

Prior to entering the ITIN, TurboTax is calculating your credits and deductions based on the assumption that he has a valid SSN once that changes, a recalculation is made to adjust the credits appropriately.

[raleighwrights]

Thank you!  You have been so helpful!