Income Tax Question - Adoption Credit

[Bob B.]

My wife and I adopted a special needs child through foster care in 2011. The adoption of a special needs child through foster care includes a $13K refundable federal tax credit.

The IRS understandably requires that to claim the $13K credit that we will need to include the adoption decree and other paper work, and file the old fashioned way via US mail. We also understand that it can take until June or July to receive any refund/credit from the IRS, including our regular tax refund.

We are expecting a $5k regular tax refund this year.

My question is: Does anyone see any problems with filing our tax return without claiming the $13K credit via e-file. Then wait for our $5k refund. Then file a 1040X that includes our claim for the adoption credit, as long as it's all done before Apr. 15?

We can wait for the $13K credit, but we're really counting on the $5K refund. Will what I described above send any red flags up for the IRS?

[creditcardfree]

I don't think it would be a problem, but I like things clean with the IRS, so I would file it all manually together as soon as possible. Just because it could take until June doesn't mean it will take that long. Just my unprofessional opinion.

I think your idea is likely fine, too.

[MonkeyMama]

Originally Posted by creditcardfree

I don't think it would be a problem, but I like things clean with the IRS, so I would file it all manually together as soon as possible. Just because it could take until June doesn't mean it will take that long. Just my unprofessional opinion.

Agreed, as a professional.

For the most part, regular tax returns are given much higher priority than amended tax returns. It won't get a red flag and is totally fine, but I assume this could significantly delay the tax credit refund, which should already take a while to process, anyway. (The IRS website says officially "8 to 12 weeks or longer" for any plain vanilla amended return). If you really need the $5k and don't care so much about the rest, I suppose it is fine. But the IRS is *slow* and I try to keep things as simple as possible with them, personally. 2011 was extra horrible with budget cuts to the IRS, etc. Just saying the amended return is more likely to be lost in space for a long long time - I'd be extra concerned this year - in 2010 I wouldn't have thought much about it. So I am making an effort to keep things EXTRA simple with the IRS these days, personally.

P.S. Is there any way you can file closer to January 31? Everything? Or was that what you were planning anyway to get the $5k?

[SnoopyCool]

There will not be a problem with waiting to file the ammendment. Just wait until you receive your initial refund before you send-in the 1040X, else you're likely to stop everything in its tracks.

[sweettxlady]

We had the credit last year and will get it again this year.. We filed all of it together through the mail.. they deposited our "regular" refund before the adoption credit.. It did take a while for the adoption credit but we got the "regular" refund very quickly as did many other adoptive parents that we know. HTH..

Mary Beth

[Bob B.]

Thanks for that information sweetxlady.

Did you e-file, then send through the mail?