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  1. #1

    Default Child Tax Credit Part Year Overseas Residence

    Hello, I am hoping to move from the US back to Ireland within the next month (I am a dual citizen US/Irish). I am wondering what my US child tax credit entitlement will be for 2020. I would plan to file for 2020 once I had been resident overseas over 330 days (physical presence test). On that basis, would I be entitled to the full $2k tax credit? Or just proportional to the amount of the year spent residing in the US?

    Appreciate your advice, thank you!

  2. #2
    Join Date
    Oct 2006
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    Default Re: Child Tax Credit Part Year Overseas Residence

    Quote Quoting Martin18
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    Hello, I am hoping to move from the US back to Ireland within the next month (I am a dual citizen US/Irish). I am wondering what my US child tax credit entitlement will be for 2020. I would plan to file for 2020 once I had been resident overseas over 330 days (physical presence test). On that basis, would I be entitled to the full $2k tax credit? Or just proportional to the amount of the year spent residing in the US?

    Appreciate your advice, thank you!
    The child has to live in the US for more than half of the year in order to take Child Tax Credit.

  3. #3
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    Default Re: Child Tax Credit Part Year Overseas Residence

    Quote Quoting Martin18
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    On that basis, would I be entitled to the full $2k tax credit? Or just proportional to the amount of the year spent residing in the US?
    You either get the credit or you don't. It's not prorated based on presence in the U.S. See Publication 972 for the rules on claiming the credit. One of the requirements is that the child must qualify as your dependent. For the rules on dependents, see IRS Publication 501.

    Quote Quoting llworking
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    The child has to live in the US for more than half of the year in order to take Child Tax Credit.
    That's not correct. The child must be either a U.S. citizen or a resident of the U.S., Canada, or Mexico to claim the credit. That's a requirement for qualifying the child as a dependent. But if the child is a U.S. citizen that child does NOT have to live in the U.S. at all, let alone for more than half the year.

  4. #4

    Default Re: Child Tax Credit Part Year Overseas Residence

    Thanks so much llworking and Taxing Matters, you guys have helped me in the past and I am grateful for your help again.

    Llworking, I know that Taxing Matters is correct that - bizarrely - the CTC is available even if the child is living overseas.

    Taxing Matters, thank you for your advice. Just to confirm, then, that even though I spend only 4 months in the US and am therefore only liable for tax on my earnings in that 4 month period, I will still in theory be entitled to the full CTC - is that correct?

    On further consideration, though, I guess I would barely get any of the credit because my income in those 4 months will have been very low. Likely less than $7k net business income plus interest earnings (most of my work is in the second half of the year). Under those circumstances, would it be safe to say that I'd hardly see any benefit from the CTC? (I've always been entitled to the full amount in the past and have no idea how it would work on much lower income.)

    Appreciate it!

  5. #5
    Join Date
    Oct 2014
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    Default Re: Child Tax Credit Part Year Overseas Residence

    Quote Quoting Martin18
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    ust to confirm, then, that even though I spend only 4 months in the US and am therefore only liable for tax on my earnings in that 4 month period, I will still in theory be entitled to the full CTC - is that correct?
    Whoa, just to be sure we are clear here, as a U.S. citizen you are subject to tax on your worldwide income, even when living outside the U.S. While you can exclude at least some of your earned income under the foreign earned income exclusion, the rest of your income received while living outside the U.S. is still subject to U.S. income tax. Again, look at the requirements for the CTC. Either you qualify for it or you don't. If you do, you get the same benefit you'd get if you were living in the U.S. The CTC is not pro rated based on time residing in the U.S. I think you'll want to look at IRS Publication 54 which provides a lot of good information for U.S. citizens living abroad.

  6. #6

    Default Re: Child Tax Credit Part Year Overseas Residence

    Thanks, TM!

    I wish I earned more than the amount of the FEIE, but I don't, so I won't be paying any US tax after I leave.

    From a bit of googling (because Pub 972 is seriously impenetrable), it seems like despite my low income for the time residing in the US, I would nonetheless stand to get most of the refundable $1,400 of the CTC. The reason being that I would likely have a negligible income tax liability and there is a bilateral agreement with Ireland that would mean I only pay SE taxes there. Does that sound reasonable?

    Thanks again!

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