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Drphibes
Level 6
February 8, 2023
Solved

REFUNDABLE CHILD TAX CREDIT LIVING OVERSEAS

  • February 8, 2023
  • 1 reply
  • 6 views

So, for the last few years anyone living more than 6 months overseas was not able to get refundable child tax credit.  Last year, there was a checkbox to declare that the parents did not live on the US more than 6 months.  That box is gone for '22 and my client (whose tax was wiped put by foreign tax credit) is getting $3,000 refundable tax credit for his 2 kinds.  Did something change in the rules?  Thanks in advance!

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Best answer by TaxGuyBill

Assuming the taxpayer had "earned income" and did not use the Foreign Earned Income Exclusion, I don't see any reason why they would not qualify.  So it seems to be working correctly to me.

In prior years, did they use the Exclusion rather than the Foreign Tax Credit?

The box on the 2021 return was due to special rules only applicable to 2021 that could make the entire Child Tax Credit ($3000 per child) refundable it they lived in the US.  But now it has reverted to the old rules, and only $1500 per child is refundable.

1 reply

Level 15
February 8, 2023

Assuming the taxpayer had "earned income" and did not use the Foreign Earned Income Exclusion, I don't see any reason why they would not qualify.  So it seems to be working correctly to me.

In prior years, did they use the Exclusion rather than the Foreign Tax Credit?

The box on the 2021 return was due to special rules only applicable to 2021 that could make the entire Child Tax Credit ($3000 per child) refundable it they lived in the US.  But now it has reverted to the old rules, and only $1500 per child is refundable.

Drphibes
DrphibesAuthor
Level 6
February 9, 2023

Yup,

Other guys were Foreign Income Exclusion.

Thanks for the clarification!