For up to 48 million adult claimants who need a little extra help with their children’s food, housing, and educational costs, the Child Tax Credit (CTC) can reduce a portion of their tax bill dollar for dollar, providing financial assistance.

This nonrefundable tax credit is available to adults with eligible dependents under the age of seventeen. According to the Internal Revenue Service (IRS), by 2025, it will be limited to $2,000, with a maximum refundable portion of $1,700.

In 2025, the income limit for the Child Tax Credit will be $400 thousand for married taxpayers filing jointly and $200 thousand for all other filers. After filing your tax return by the April 15 deadline, the IRS may send you payment 21 days later; you should check the status of your return online.

This is what you need to know to claim the Child Tax Credit for children living abroad

United States citizens who have had to relocate to a foreign country for a variety of reasons may be wondering if they are eligible for the Child Tax Credit.

The answer is yes because the eligibility rules remain the same; however, they should be aware that claiming the Foreign Earned Income Exclusion (FEIE) may affect their eligibility for the entire credit.

If you choose CTC over the foreign earned income exclusion, you can still deduct the non-refundable portion of the Child Tax Credit on your tax return as a US citizen living abroad. For example, keep in mind that you could be eligible for a refund that increases from $1,000 in 2024 to $1,400 in 2025.

Who qualifies for the Child Tax Credit?

The Child Tax Credit is available to all eligible children with a Social Security number who can work in the US. In order to qualify as a child for the 2023 tax year, your dependent must:

• be younger than seventeen at the end of the year.
• Be a sister, brother, stepbrother, stepsister, half-brother, half-sister, son, daughter, stepchild, eligible foster child, or a descendant of one of these.
• No more than half of their funds should be provided throughout the year.
• You must have lived with the child for more than half a year.
• be accurately included on your tax return as a dependent.
• Fail to file a joint return with your spouse for the tax year, or file a return only to receive a refund of estimated or withheld income taxes.
• You must be an American citizen, national, or foreign resident in the country

If you meet all of the eligibility requirements and your annual income is less than $200,000 ($400,000 if filing a combined return), you are eligible for the full 2023 Child Tax Credit for each qualified child. Higher-earning parents and guardians may be eligible for a partial credit.

Other tax credits available for families in the US

If you qualify for the Child Tax Credit (CTC) in the United States, you may also be eligible for the following other tax credits:

Child and Dependent Care Credit: If you hired someone to care for your child or another eligible person while you and your spouse worked or looked for a new job.

If these conditions are met, you may be eligible for a credit for dependent and child care costs. If you include the Child and Dependent Care Credit on your tax return, you may be able to reduce your federal income tax.

Earned Income Tax Credit: This federal credit is well-known among Americans because it provides tax relief to families and workers with low to moderate incomes. You can use the credit to reduce your tax liability and, if eligible, increase your refund.

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