How to Claim Your Refundable Child Tax Credit Break

The Child Tax Credit is an important credit which may be worth as much as $1,000 per child.

For US expatriates, Child Tax Credit is available for each kid under 17 years old. Unfortunately, if you earned less than exemptions and standard deductions, you will lose the $1,000 per child as you will owe no tax and there would be nothing to be credited. This is is also the case if you claim the Foreign Earned Income Exclusion and exclude up to about $99,200 for 2014 (or $100,800 for 2015) instead of the Foreign Tax Credit.

Mother teaching daughter how to play guitar

This being said, there´s one remarkable thing about this credit; sometimes, even if you owe no tax, there´s still a potential to get the full $1,000 per child if you have a certain amount of earned income. This credit is the additional child tax credit.

Essentially, any income less $3,000 multiply by 15% become your credit.

Let´s take the example of an Expatriate with about $5,000 of earned income:

Earned  Income 1                                               $ 3,713

Earned Income 2                                               + 1,595             5,308

Base amount                                                                             (3,000)

Net Amount                                                                                2,308

Percentage for Child Tax Credit                                                15%

Additional Child tax Credit                                                   $346

That means that for future years, in order to get the full $1,000 tax credit earned income has to be approximately $9,660 for 2015.

Make sure you use this tax break using US Federal Schedule 8812, Additional Child Tax Credit.

Need More Information on Child Tax Credit?

Please do not hesitate in contacting us should you need any additional information with regards to the Child Tax Credit.