Child Tax Credit 2022: How Will CTC Affect Expats Tax Returns in 2022?
With the New Year, U.S. citizens in and outside America have become busy filing their federal taxes. This is indeed an intricate task which calls for a thorough knowledge of the policies, especially the new and updated ones. Seeking guidance from a personal tax consultancy service in Toronto is the best option to parry unwanted consequences of failing to pay the tax properly. Now coming to Child Tax Credit or CTC, there have been some modifications brought in recently you must be aware of. Parents now can claim advance payments of the respective year’s CTC under new policies. For instance, parents can claim up to $300 per month for each child below the age of six. The amount dips down to $250 per child each month for children between ages six and seventeen.
As a consequence, you may not claim the full amount of Child Tax Credit on your IRS returns if you already have received the advance payments as mentioned above. If you need further clarification on this topic, please get in touch with US tax consultants in Toronto. Contact tax consultation service in Toronto to resolve tax issues.
Now let’s see how your expat tax is connected to the revised Child Tax Credit policy.
- As an American citizen living abroad, you can claim the Child Tax Credit with a slight variation in the refund policy. First of all, if you have opted for the exclusion of foreign earned income from your annual federal tax, you cannot claim the refundable portion of the Child Tax Credit.
However, if you opt for foreign tax credit instead of foreign earned income exclusion, you can claim the Child Tax Credit refund. The amount has recently been revised and the refundable quantity of the credit has been increased from $1000 to $1400 till 2025.
- The non-refundable portion of the Child Tax Credit is the amount that you can use to lower the annual payable tax. The expats’ tax is determined by combining your foreign income and income incurred within the U.S. Therefore, expats like to usurp the opportunity of counting the non-refundable Child Tax Credit to decrease the annual tax.
The new rules pertaining to the Child Tax Credit allow you to draw up to a credit of $2000 per child on your tax return. For more information on this, please contact expats Tax Consultants in Toronto.
