- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Deductions & credits
If you have Form 2555 (Foreign Earned Income Exclusion) on your return, you can't get the refundable additional child tax credit (ACTC). (See notes about this HERE.) This applies even when income exceeds the exclusion amount.
In your initial question, you mentioned taking the foreign tax credit. Using this method, you are eligible for the ACTC, assuming you otherwise meet the qualifications.
You can take a credit (on Form 1116) that fully lowers your tax to $0 and still receive the refundable ACTC. However, if you take the exclusion you are not eligible for the refundable portion of the credit.
You must have a minimum of $2,500 of earned income to qualify for the credit, but it's okay if the tax calculated is offset fully by the foreign tax credit.
CAUTION: If you have filed in the past using the Foreign Earned Income Exclusion (Form 2555), failing to file it when you have foreign earned income results in revocation of the exclusion. Once revoked, you cannot use the exclusion again until the 6th tax year after revocation without written permission from the IRS. This can be important in some cases, so you want to proceed carefully before revoking the exclusion, if applicable.
**Mark the post that answers your question by clicking on "Mark as Best Answer"