clarification for Child tax Credit 2018?

I'd like to know if my wife and I (both USA citizens) are allowed to get the 2018 Child tax Credit for our children in our joint 2018 federal tax return, although our children lived most of 2018 abroad with my wife (who is their mother), because my wife was there for her work (in a non-USA institution).   

 

Note that: I provided more than 50% of their cost of living. I lived in USA all 2018 (except for vacation time, and business travels). they visited me for about 2 months in 2018.  my wife plans to claim the foreign-earned income credit for her European income. 

 

Please advise. Thx in advance!  

Get your taxes done using TurboTax

Here are all the rules ... when they say "YOU" they mean both or either of the parents on a joint return...

 

To claim the Child Tax Credit, you must determine if your child is eligible. There are seven qualifying tests to consider: age, relationship, support, dependent status, citizenship, length of residency and family income. You and/or your child must pass all seven to claim this tax credit.

How to determine who qualifies

Here’s how to determine which of your kids will qualify you for the credit:

  1. Age test 
    To qualify, a child must have been under age 17 (i.e., 16 years old or younger) at the end of the tax year for which you claim the credit.
  2. Relationship test
    The child must be your own child, a stepchild, or a foster child placed with you by a court or authorized agency. An adopted child is always treated as your own child. ("An adopted child" includes a child lawfully placed with you for legal adoption, even if that adoption is not final by the end of the tax year.)You can also claim your brother or sister, stepbrother, stepsister. And you can claim descendants of any of these qualifying people—such as your nieces, nephews and grandchildren—if they meet all the other tests.
  3. Support test
    To qualify, the child cannot have provided more than half of his or her own financial support during the tax year.
  4. Dependent test
    You must claim the child as a dependent on your tax return.Bear in mind that in order for you to claim a child as a dependent, he or she must: 1) be your child (or adoptive or foster child), sibling, niece, nephew or grandchild; 2) be under age 19, or under age 24 and a full time student for at least five months of the year; or be permanently disabled, regardless of age; 3) have lived with you for more than half the year; and 4) have provided no more than half his or her own support for the year.
  5. Citizenship test
    The child must be a U.S. citizen, a U.S. national or a U.S. resident alien. (For tax purposes, the term "U.S. national" refers to individuals who were born in American Samoa or in the Commonwealth of the Northern Mariana Islands.)
  6. Residence test
    The child must have lived with you for more than half of the tax year for which you claim the credit. There are important exceptions, however: A child who was born (or died) during the tax year is considered to have lived with you for the entire year. Temporary absences by you or the child for special circumstances, such as school, vacation, business, medical care, military services or detention in a juvenile facility, are counted as time the child lived with you. (There are also some exceptions to the residency test for children of divorced or separated parents. For details, see the instructions for Form 1040, lines 51 and 6c.)
  7. Family income test
    The child tax credit is reduced if your modified adjusted gross income(MAGI) is above certain amounts, which are determined by your tax-filing status. In 2017, the phase out threshold is $55,000 for married couples filing separately; $75,000 for single, head of household, and qualifying widow or widower filers; and $110,000 for married couples filing jointly. For each $1,000 of income above the threshold, your available child tax credit is reduced by $50. Beginning in 2018, the phaseout of the credit begins with $200,000 in income ($400,000 for married filing jointly).

What if the credit exceeds my tax liability?

For tax years prior to 2018:

The Child Tax Credit is nonrefundable; if your credit exceeds your tax liability, your tax bill is reduced to zero and any remaining unused credit is lost. However, you may be able to claim a refundable Additional Child Tax Credit for the unused balance. You can find out if you're eligible for this refundable credit by completing the worksheet in IRS Form 8812.

For tax years after 2017:

The new Child Tax Credit is worth up to $2,000 per qualifying child with a refundable amount of up to $1,400 per qualifying child. The phaseout for the credit begins at $200,000 ($400,000 for joint filers).

Remember, when you file your taxes with TurboTax, we’ll ask simple questions about you and your kids and figure out exactly how much of the Child Tax credit you’re eligible to receive.

 

 

 

The Child Tax Credit is a non-refundable credit. This means that if your tax liability has already been reduced to 0, then you will not further benefit from this credit. 

It is also reduced by other non-refundable credits you may be receiving (such as the Child and Dependent Care Credit)

The Additional Child Tax Credit is a refundable credit (up to $1,400) and can be refunded to you even if your tax liability has been reduced to 0. 

 

If you'd like to see how this works on your Form 1040, follow the instructions below: 

1.) On the left-hand side of your screen, click Tax Tools

2.) Click Tools

3.) On the window that pops up, click View Tax Summary

4.) On the left-hand side of your screen, click Preview My 1040. 

 

Your Child Tax Credit will be on line 12a. If the amount that is on line 12 equals what is on line 11, then your tax liability is 0 and this is why you did not receive the child tax credit. 

If you have an amount on line 17b, this means that you received the Additional Child Tax Credit.