can I choose to revoke forgien earned incomre exclusion and use that forgein income to qualified for child income credit?

[schofield7]

can I choose to revoke forgien earned incomre exclusion and use that forgein income to qualified for child income credit?

[Anonymous_]

@pk?

[pk]

@schofield7 , please I need to know the following info:

(a) are you a US person ( citizen / GreenCard) ?

(b) Tax home  ( country name ) and are you a citizen of that country ( if you are not US citizen)?

(c) Is child credit the only reason you would like to NOT USE  FEIE ?   How long have you been using FEIE or is this your first year ?

(d) are you talking about tax year 2022  or 2023 ?

I will circle back once I hear from you 

pk

[xmasbaby0]

There is no credit called the "child income credit."   Are you asking about the child tax credit?  The child and dependent care credit?   Or earned income credit?

https://ttlc.intuit.com/questions/1900923-what-is-the-child-tax-credit

https://ttlc.intuit.com/questions/1900643-what-is-the-child-and-dependent-care-credit

https://ttlc.intuit.com/questions/1899157-what-are-the-qualifications-for-the-earned-income-credit-e...

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant

[schofield7]

Thanks for your help!

I am a USA citizen,

working in Ireland. All my income was from an Ireland college and I have been there all of 2022 and 2023 so far.

If I don't take the forgien income exclusion, my Tubo tax says I will get like $3,000 in child tax credit.

But not sure of my income counts if none is from any USA entity or if it is legal to not take the exclusion?

[schofield7]

Thanks for your help!

I am a USA citizen,

working in Ireland. All my income was from an Ireland college and I have been there all of 2022 and 2023 so far.

If I don't take the forgien income exclusion, my Tubo tax says I will get like $3,000 in child tax credit.

But not sure of my income counts if none is from any USA entity or if it is legal to not take the exclusion?

Bruce

[pk · Accepted solution]

@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