Child tax credits: Are expats and immigrants eligible?
CHILD TAX CREDIT is a type of tax benefit given to US taxpayers for each eligible dependent child. For 2021, taxpayers are provided a credit of up to $ 3600 per child under the age of 6 years and $ 3000 for children aged between 6 to 17 under the CTC. There is no cap on the total credit amount that an applicant with more than one child can claim. The credit is fully refundable and families with low income qualify for the maximum credit and if the credit is more than taxes owed, families can receive the extra amount as a tax refund.
Who can claim Child Tax Credit (CTC)?
To claim CTC, you need to be qualified under two heads. One must be a qualifying taxpayer and the dependent child must meet tax-law requirements in order to receive the credit.
Qualifying Taxpayer
Mostly, taxpayers qualify for the CTC by claiming credits under the name of their children or step-children. Meanwhile, other family members also may qualify if the taxpayer has provided more than half of the monetary support to the child during the financial year. Adopted and foster children can also qualify for the credit.
Qualifying Child/dependent
Several factors that determine a child’s ability for the child tax credit are prescribed by the tax law. To qualify, they must be US citizens, US nationals or US resident aliens, meeting the dependence, age and other requirements.
What about Expatriates?
The new American Rescue Plan Act of 2021 has several provisions that are potentially relevant for US citizens living abroad.
International Tax Consultant in the US says that the new act has limited benefits for expatriates. For US expats in 2021, expanded child tax credit including the increased amount is fully refundable but only for a taxpayer with the principal place of residence in the US for more than one half of the tax year, or for a taxpayer who is a Bonafide resident of Puerto Rico for the tax year.
Can immigrants claim the child tax credit (CTC)?
According to a major Tax Consultant in Florida, The Accounting & Tax Company, immigrants who work in the US and have either a social security number or individual taxpayer identification number (ITIN) main get the Child Tax Credit as long as they meet other eligibility requirements children claim for the credit also must have a social security number or an ITIN. The children claim for the credit must be living in the US and be claimed as dependents on the tax return
Tax Consultant in Florida explains that, for immigrants who don’t have an ITIN, they can submit form W-7 with their tax return by either mailing in their form and supporting documents for locating an in person processing centre. For renewing an existing ITIN, they can complete the same form W-7 without filing a tax return.
The New American Rescue Plan Act of 2021 aims to provide financial support to emancipate 45% of American children out of poverty with a package of 1.9 trillion USD.
With proper guidance and help from experts like The Accounting & Tax Company, you can also claim maximum benefit out of the plan.
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