How to Claim the Child Tax Credit for Children Living Abroad

The Child Tax Credit (CTC) is a vital financial aid for many parents and guardians living in the U.S. This credit helps them cover their children’s food, housing, and education expenses. Through the CTC, eligible individuals can reduce their tax bill dollar for dollar. This non-refundable tax credit is for adults who have eligible dependent children under the age of 17. Through 2025, this credit will be limited to $2,000, with a refundable portion of up to $1,700.

Income limits for the Child Tax Credit in 2025:

In 2025, the income limits for the Child Tax Credit will remain the same: for married couples filing jointly, the limit will be $400,000, while for all other filers the limit will be $200,000. If you file your tax return by April 15, you can receive a payment from the IRS within about 21 days. You should check the status of your return online.

How to Claim Child Tax Credit for Children Living Abroad

US citizens who are living in foreign countries for various reasons are interested in knowing if they can avail themselves of the child tax credit. The answer is yes, as the eligibility rules remain the same, but they should keep in mind that claiming the Foreign Earned Income Exemption (FEIE) may affect eligibility for the full credit.

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If you use the CTC while living abroad, you can use the non-refundable portion as a deduction on your tax return. For example, in 2024 you may get a refund of $1,000, which may increase to $1,400 in 2025.

Who is Eligible for the Child Tax Credit?

The child tax credit is available if the child has a Social Security number and is eligible to work in the US. Generally, eligibility for your dependent child must be as follows:

• The child must be under 17 years of age at the end of the year.
• He or she can be your sibling, step-sibling, half-sibling, son, daughter, stepchild, qualified foster child, or descendant.
• The child must not pay more than half of his or her expenses during the year.
• You must live with the child more than half the time.
• The child must be correctly included as a dependent on your tax return.
• You must not file a joint tax return or file a return to receive a refund of only estimated or withheld income taxes.
• You must be a U.S. citizen, national, or resident living abroad.

If you meet all of these eligibility criteria and your annual income is less than $200,000 (or $400,000 for a joint return), you are eligible for the 2023 child tax credit for each qualifying child. Higher-income parents and guardians may qualify for a partial credit.

Other tax credits for families in the US

If you qualify for the child tax credit (CTC), you may also benefit from other tax credits:

• Child and Dependent Care Credit: If you hired someone to care for your child or another eligible person so you and your spouse can work or find new work, you can get this credit for child and dependent care expenses. It can reduce your federal income tax amount.
• Earned Income Tax Credit (EITC): This federal credit provides tax relief to low- to moderate-income families and workers. If you qualify for it, you can increase your return while reducing your tax liability.

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Conclusion

The child tax credit can be claimed even while living abroad, but it’s important that you understand all the rules and options before you choose the Foreign Earned Income Exemption (FEIE). This credit not only helps in reducing your tax bill but also provides financial support for your children. This credit can improve your tax return in 2025 and help you get an additional refund. So, if you are a US citizen and living abroad, check the eligibility and follow the right procedure to avail yourself of this credit.

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