La Quinta, CA
(760) 895-3516

Thursday, April 30, 2015

Claiming Child Tax Credit While Living in Canada (Yes, you can actually benefit from filing U.S. income taxes abroad)

As a U.S. Citizen living in Canada and having a child under 17 and you make less than the phase out amounts, you can qualify to receive up to a $1,000 refund using the 8812 Additional Child Tax Credit, which is a refundable income tax credit. Here's how this works:

Claiming the Child Tax Credit While Living Abroad

  • The child must have lived with you for more than 7 months of the year (yes, even if you lived outside the country i.e Canada)
  • You cannot use 2555 Foreign Income Exclusion
    • 2555 Eliminates additional Child Tax Credit because you have no earned income
  • You must use the Foreign Tax Credit 1116
  • You can amend the previous 3 years to swap 2555 with 1116
 If you'd like to see how you can take advantage of the Additional Child Tax Credit by filing the 1116 Foreign Income Tax Credit, call Borders Bookkeeping today.

(760) 895-3516