pk
Level 15
Level 15

Deductions & credits

@schofield7 , you are correct in that when you file a form 2555 ( foreign earned income exclusion ), you are automatically disqualified  from claiming child tax credit and additional child tax credit.

You can rectify this situation by not excluding your foreign income and taking foreign tax credit instead.

 

You can change from Foreign Earned Income exclusion but once you do that your new  choice would be valid for five tax years  ( you cannot change back for that period ).

 

While this doe not fair to me , I am still re-searching the code / statute  and  case law  to see why we have this limitation on excluded income  ( considering that when you exclude income, for purposes of  residual income tax, your excluded income is included  to put you in a higher tax bracket )

 

Hope this helps 

 

pk

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