Child Tax Credit

[Omartine]

I have 2 daughters 4 and 2 yo. They are my dependents same as my wife. I requested an ITIN number but since I was not claiming any tax credit they denied the ITIN. Why my 2022 tax file did not asked for any credit even if I added my 2 daughters there?

At the end they requested to take out my 2 daughters from the file and only my wife was added as dependent, she received the ITIN number.

If this was not filed correctly, is it possible to correct this even if the refund was performed?

Thank you!

[xmasbaby0]

You cannot get the child tax credit for a child who does not have a Social Security number.  And, sorry, but you cannot go back and amend a 2022 return later on after getting a SSN and get the credit.  It does not work that way.   You must have a SSN for the child at the time you file in order to get the child tax credit.  With an ITIN it would be possible only to get the $500 credit for other dependents, ---not the child tax credit.

[Omartine]

Thanks for the quick response.

Im basing my question on this information: https://turbotax.intuit.com/tax-tips/family/rules-for-claiming-a-dependent-on-your-tax-return/L8LODb...

All the questions are answered yes, they are Mexican residents with TD visa. They dont hold a SSN but why ITIN can not be issued?

There are two types of dependents, each subject to different rules:

• A qualifying child
• A qualifying relative

For both types of dependents, you'll need to answer the following questions to determine if you can claim them. 

• Are they a citizen or resident? The person must be a U.S. citizen, a U.S. national, U.S. resident, or a resident of Canada or Mexico. Many people wonder if they can claim a foreign-exchange student who temporarily lives with them. The answer is maybe, but only if they meet this requirement. There are certain exceptions for adopted children.
• Are you the only person claiming them as a dependent? You can't claim someone who is claimed as a dependent on another tax return. You also can't claim a person who states that they are not able to be claimed as a dependent on their own tax return (takes a personal exemption for himself). Finally, a dependent cannot claim another person as a dependent on their own tax form. These requirements commonly apply to children of divorced parents. There are certain “tie breaker rules,” which are found in IRS Publication 501. These rules establish income, parentage, and residency requirements for claiming a child.
• Are they filing a joint return? You can't claim someone who's married and files a joint tax return. Say you support your married teenage son. If he files a joint return with his spouse, you can't claim him as a dependent. (This rule doesn't apply if the dependent files a joint return only to claim a refund of income tax withheld or any estimated tax paid.).

• Are they related to you? The child can be your son, daughter, stepchild, eligible foster child, brother, sister, half brother, half sister, stepbrother, stepsister, adopted child or an offspring of any of them.
• Do they meet the age requirement? Your child must be under age 19 or, if a full-time student, under age 24. There's no age limit if your child is permanently and totally disabled.
• Do they live with you? Your child must live with you for more than half the year, but several exceptions apply.
• Do you financially support them? Your child may have a job, but they cannot provide more than half of their own support.

[KimberW]

Hi Omartine,

In the article that you posted, there are some questions that apply to dependents who are qualifying children and some that apply to qualifying relatives. Generally, qualifying children will be eligible for a Child Tax Credit while qualifying relatives would only be eligible for a "Other Dependent Credit" which is up to $500 per dependent. Both of these credits - the Child Tax Credit and Other Dependent Credit - are limited by your modified adjusted gross income. If you filed a joint return with your wife and your MAGI was more than $400,000 then the credits are phased out - potentially to $0.

But, even if your daughters would otherwise be your qualifying children, they do not qualify for the higher Child Tax Credit because they did not have social security numbers assigned before the due date of your 2022 return.

Based on the information you provided in your follow-up post, your daughters could have qualified you to potentially receive the "Other Dependent Credit" for them.  In your case, with a maximum potential credit of $1,000, the credit would have been entirely phased out if your MAGI was $420,000 or higher.

Regarding the issuance of an ITIN: For tax years beginning after 2017, spouses or dependents aren’t eligible for an ITIN unless they qualify for an allowable tax benefit. Your wife qualified for an ITIN because filing a joint return doubles the standard deduction allowed on your return. This reduction in taxable income is a tax benefit.

Your daughters -- if they qualified for the Other Dependent Credit and that credit wasn't limited by your income -- should also be eligible for ITINs because the credit is a tax benefit. But, if your income was high enough or there was some other reason that your daughters didn't qualify as your dependents, then there is no tax benefit for simply listing them on your return. 

You can use the following interactive tax assistants from the IRS to go through the questions and answers to double-check your main points: 1) that your daughters qualify as your dependents, 2) that they qualify for the tax credit for "other" dependents, and 3) that they qualify for an ITIN.

IRS Interactive Tax Assistants

• Whom may I claim as a dependent? Note: answer these questions from your perspective.
• Does my child/dependent qualify for the child tax credit or the credit for other dependents? Note: answer these questions from your perspective. Remember that there is a phase out for this credit above certain income levels.
• Am I eligible to apply for an individual taxpayer identification number? Note: answer these questions from your daughters' perspectives. Remember that there is a requirement that there be a tax benefit for adding your daughters to your return.

I suggest that you use the interactive tax assistants above to check the most basic details about qualifications. Check the calculations on Schedule 8812 in your original return (before you removed your daughters) and see if it agrees with your expectations. (You can see a blank copy of that schedule for 2022 here: 2022 Schedule 8812.)

If you believe your daughters do qualify you for a tax benefit -- and they should, therefore, qualify for an ITIN -- then you could possibly amend your 2022 return to claim them again. But you would need to somehow resubmit your original W-7 applications for them in order to get any benefit on your 2022 return. ITINs can only be used for a tax benefit on a particular year's return if the application for the ITIN was submitted before the due date (including any extensions) for the tax return. Filing new W-7 applications for your daughters now would not have any impact on your 2022 return.

If you filed an extension for your 2023 return and file W-7 applications now, then getting an ITIN for your daughters would count for your 2023 return.

For W-7 applications, you can find a local acceptance agent by searching for your state here: Acceptance Agent Program. An Acceptance Agent will verify your daughters' identity documents, take certified copies of them, and send the copies with the W-7 applications to the IRS. This prevents you from having to mail original passports and other identification to the IRS. Call around to several, though. They make their own decisions on pricing and some will offer more in-depth services than others.

Finally -- if you filed your 2022 tax return with TurboTax and need additional assistance with the specific details of your case that shouldn't be shared here (such as your income or specific entries on your tax forms), please call us at 800-446-8848. We'd be happy to help.