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