What is Child Tax Credit and How US Expats Can Avail the Benefit?
Millions of US residents work in different nations and spend a considerable period of their life on foreign soil. The most prominent destination is the neighboring country, Canada. As a US expat and professionally working outside, you can claim the child tax credit; however, there might be some alteration in the filling process. As per the 2017 Tax Cuts and Jobs Act, an American expat can claim the benefit of two US child tax credits. As a substantial number of US citizens work in Canada, one can acquire detailed information by visiting US Tax consultants in Toronto or expats tax consultants in Toronto. Let’s acknowledge complete aspects of Child Tax Credit and how one can avail its benefits:
What is Child Tax Credit?
The Child Tax Credit (CTC) is financial assistance provided by the US government to reduce the tax liability of American expats for their children. It is a refundable credit intended to mitigate a certain amount for the overall US Tax bill. The eligible child must be 16 years of age or younger at the last date of the tax year and spend at least six months of the year with parents.
In addition, the child must be a US citizen and possess a US social security number. At present, the Credit benefits can be availed up to $2000 credit per eligible child on your overall tax return. However, the maximum refundable credit threshold is $1400 in a taxable year.
Eligibilities and Requirements to Avail Child Tax Credit (CTC)
In order to avail of the benefits of Child Tax Credit, there are few essential eligibility requirements that the dependent child has to meet. A total of seven prominent tests as per IRS in various categories. Let’s acknowledge the eligibility and requirements to claim the credit as a US expat:
- Age: the intended child should be 16 or younger during the tax year.
- Citizenship: The child must fulfil the criteria of a US citizen or US national.
- Relationship: To claim the credit, the child must be related to a US expat. The individual can be a daughter, son, stepchild, or an adopted child. One can also claim CTC for a descendant of your brother and sister, such as a nephew, niece, or grandchild.
- Support: The child shouldn’t be able to provide half of their own livelihood support.
- Dependence: As an American expat, you need to provide substantial evidence that the child is dependent on your expat tax return.
Residence: The intended child must have spent or lived with you during the taxable year.
Child Tax Credit Assistance in Canada
As Canada is considered as the hub of working American expats, the IRS provides inclusive service to assist the US expats in strenuous and complicated processes of claiming Child Tax Credit. You can reach international tax consultants in Toronto, tax consultants in New Orleans, or tax consultants in Palm Springs. Depending on your residence location, you can visit these departments at your convenience to get comprehensive assistance. In addition, one can also take assistance from prominent corporate tax consultants in Toronto and receive international tax consultancy service in Toronto.
