The US Child Tax Credit – Guide For American Expats

The child tax credit can be a significant financial benefit for expat families abroad. Living abroad does not preclude you from claiming the child tax credit for qualifying dependent children under the age of 17.

If you don’t owe US taxes, you might still be eligible for a partial refund through the refundable portion called the Additional Child Tax Credit (ACTC). But before filing, expats should understand how the Foreign Earned Income Exclusion (FEIE) and Foreign Tax Credit (FTC) affect eligibility.

To claim the credit, you must meet the requirements and file your US tax return. Here we explain the child tax credit, who is eligible for it, and how expats can claim it.

What Is The Child Tax Credit?

The Child Tax Credit is a federal tax credit that was created to support families with qualifying children.

The maximum amount is $2,000 per eligible child under the age of 17.

In general, the child tax credit (CTC) is a non-refundable tax credit. This means that it reduces the amount of tax you owe on a dollar-for-dollar basis, but you won’t get a refund from the IRS for this amount if you don’t owe tax.

However, you might be able to apply for a refund for unused credit of up to $1,700 per qualifying child (2024 tax year). This refundable portion of the child tax credit is also called additional child tax credit (ACTC).

Child Tax Credit 2021 Changes

The American Rescue Plan Act stimulus bill of 2021 increased the credit temporarily to up to $3,600 for children under the age of 6 and $3,000 for children ages 6-17 (under the age of 18) for the 2021 tax year.

This provision was not extended to 2022.

Important for Americans abroad, only taxpayers who had a principal place of abode or residence in the United States for more than six months of 2021 were eligible.

What changed for 2025?

Congress updated the Child Tax Credit in the “One Big Beautiful Bill Act.”, increasing the credit amount and adjusting how unused amounts carry over between years.

The maximum credit increases to $2,200 per qualifying child from 2025, with up to $1,700 refundable still.

Can Americans Still Claim The Credit When Living Abroad?

Yes. US citizens and green card holders living abroad can claim the Child Tax Credit if they:

• File a US tax return,
• Have at least $2,500 in earned income, and
• List qualifying dependent children with valid Social Security Numbers (SSNs).

You’ll need to report each child’s name, SSN, and relationship on Schedule 8812 (Credits for Qualifying Children and Other Dependents).

We explain in a moment how expats can reduce their US taxes without the FEIE and claim the refundable portion of the child tax credit.

How the FEIE and Foreign Tax Credit affect the Child Tax Credit

Many expats lose the refundable portion of the credit because they exclude all their income under the Foreign Earned Income Exclusion (FEIE).

Here’s the key rule:

• If you use the FEIE and exclude all your foreign earned income, you cannot claim the refundable portion (ACTC).
• If you instead use the Foreign Tax Credit (FTC) to offset US taxes paid abroad, your income remains “taxable” in the US, which allows you to claim the refundable portion of the credit.

Another advantage of choosing the Foreign Tax Credit over the FEIE is that your income remains taxable in the US, which means you can also make contributions to retirement accounts such as IRAs. This can be an important long-term benefit for expats who want to continue building retirement savings while living abroad.

Example: A US parent in Germany earns $70,000. If they use the FEIE, their taxable income becomes $0 and they lose the refundable portion of the CTC. If they use the FTC instead, they can often reduce their US taxes to zero while still qualifying for a refund of up to $1,700 per child.

This makes choosing between FEIE and FTC an important strategic decision for expat families.

Can You Claim The Child Tax Credit Retroactively?

You can claim the child tax credit for up to three years after the filing due date. So, if you were unaware of it, you can amend prior year returns.

If you haven’t file US taxes at all because you were below the filing thresholds, you can still file your last 3 years returns to claim the tax credit. Note that you need at least $2,500 total earned income (2022) to claim the refundable portion of the CTC.

However, if you exceeded the filing thresholds but didn’t know you had to file your US taxes, you can catch up on prior years using the IRS Streamlined Program. With the Streamlined Program, late filing penalties can be waived.

If you previously used the Foreign Earned Income Exclusion and missed out on the refundable portion of the Child Tax Credit, you may be able to amend prior-year returns to switch to the Foreign Tax Credit and claim it retroactively.

However, switching between the FEIE and FTC is restricted, so it’s best to make this change under professional guidance.

Who Qualifies For This Tax Credit?

US taxpayers must be a US citizen, green card holder, or resident alien to be able to claim the credit. It is not available to non-resident aliens.

They can claim the credit for each qualifying child that meets the following criteria:

• Is under the age of 17 at the end of the year (except for tax year 2021, where it was under 18).
• Is your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of one of these (for example, a grandchild, niece, or nephew).
• Has a US Social Security number that is valid for employment and was issued before the due date of the tax return (including extensions).
• Provides no more than half of their own financial support during the year, meaning you provide at least half of their support.
• Has lived with you for more than half the year.
• Is properly claimed as your dependent on your tax return.
• Does not file a joint return with their spouse for the tax year or file it only to claim a refund of withheld income tax or estimated tax paid.
• Is a US citizen, US national, or US resident alien.

New rule for 2025: at least one parent on the tax return must also have a valid US SSN.

Income Thresholds For The Child Tax Credit

The child tax credit is subject to income limits. To get the full amount of the Child Tax Credit for each qualifying child for the 2022 tax year, your modified adjusted gross income (MAGI) must be below $200,000 ($400,000 if filing a joint return).

The credit phases out above those thresholds. That means, parents and guardians with higher incomes may be eligible to claim a partial credit.

You can claim the child tax credit for up to three years after the filing due date.

Common Child Tax Credit mistakes expats should avoid

Avoid these errors. The IRS often rejects CTC claims for missing documentation rather than ineligibility.

1. Using the FEIE and accidentally disqualifying themselves from the refundable portion.
2. Forgetting to include the child’s SSN (or using an ITIN instead).
3. Not attaching Schedule 8812 to their return.
4. Overstating foreign income or forgetting to report part-year residency changes.
5. Assuming they’re ineligible because they owe no US income tax.

Questions expat parents often ask about the child tax credit abroad

Do Americans living abroad still qualify for the Child Tax Credit?

Yes. US citizens or resident aliens living abroad can claim the Child Tax Credit if children satisfy IRS criteria and you have enough earned income.

How does using the Foreign Earned Income Exclusion (FEIE) affect the credit?

You lose eligibility for the refundable portion (Additional Child Tax Credit) if you exclude your income under FEIE.

What is the maximum credit amount per child?

For 2024, the maximum is $2,000 per qualifying child, with up to $1,700 refundable under the Additional Child Tax Credit. 

Do both you and your child need Social Security Numbers?

Yes. The child must have a valid SSN issued before the tax return due date, and at least one parent (for joint filers) must have one as well. 

Can I claim the credit for past years if I missed it?

Yes. You can amend returns for up to three years back to claim the Child Tax Credit and refundable portion if eligible.

How do I decide between FEIE and Foreign Tax Credit (FTC) to maximize credit?

If you use FTC instead of FEIE, you can retain a higher taxable income base, which may allow you to access the refundable portion of the credit (ACTC).

Making the most of the Child Tax Credit as an expat

The Child Tax Credit remains one of the few US tax benefits that expat parents can still take advantage of,  but only if they structure their tax filing correctly. To qualify for the refundable portion, you need earned income that isn’t excluded under FEIE, valid SSNs, and a properly filed Schedule 8812.

Even if you don’t owe US income tax, you may still be eligible to receive a refund of up to $1,700 per qualifying child. But claiming it successfully depends on the right strategy, especially when deciding between the FEIE and the Foreign Tax Credit, managing reporting requirements, and maintaining eligibility year to year.

If you’ve missed the credit in previous years or aren’t sure which approach is best for your situation, it’s worth reviewing your filing options with a qualified expat tax professional who can help you recover missed refunds and optimize your future filings.