Can I declare my nonresident alien children as my dependents and claim child tax credit?

[nuno-viegas-lope]

According to the substantial presence test I'm a resident alien, since I've been in the US for over 183 days during 2015. My children however have come to the US later than me and have been in the US for less than 183 days during 2015 (and 0 days in the years before), therefore they're still nonresident aliens.

During 2015 my children have lived with me for over 6 months, but not all this time was in the US, part of it was in my home country. My wife does not work and does not have any income.

Can I declare my children as my dependents and claim child tax credit?

[nuno-viegas-lope]

Assuming I can't declare my children in this situation as dependents and claim child tax credit, can I at least claim exemptions for them?

[bine22]

When did your children come to the US? And your wife? When did you come? and on what visa?

[bine22]

And where are you all from?

[nuno-viegas-lope]

We're all from Portugal. I'm on a L1 Visa, my wife and children are on L2. I've been coming to the US on and off since January 2015 under the ESTA program for business reasons, until we all got our Visas in June. We then came here late July under the L1/L2 Visas. I've been over 200 days in the US during 2015. My wife and children have been in the US for less than 150 days. Thanks for your help.

[bine22]

Were you in the US January 1st?

[nuno-viegas-lope]

No, not on the 1st. Mid-January.

[bine22 · Accepted solution]

First, you yourself are a dual status alien.

As a dual status alien you would file a dual status return, which is not supported by Turbotax.

However, since you were a resident alien at the end of the year you can, together with your spouse, choose to be treated as resident aliens and file a joint return. Bot h of you would have to report worldwide income for the entire year in this case. You would need to attach a statement making this choice and an application for an ITIN for your wife, unless she has one or is eligible for an SSN or already has an SSN. Regarding your children: If they will become resident aliens in 2015, you can make the first year choice for them once they meet the SPT. The first year choice would make them resident aliens starting the day they came to the US (so they would be dual status aliens for 2015). You can then claim them as dependents and claim the child tax credit (you would answer on Schedule 8812 to the question if the meet the Substantial Presence Test Yes and No and attach the statement making the choice to the return).

[nuno-viegas-lope]

Thanks for the reply, that was helpful. I still have a few doubts:

1 - Regarding myself and my wife, and if I understood you correctly, we can 1) file separate returns where I file a dual status return and she files as nonresident, or we can 2) choose to be treated as residents and file a joint return. In the later case we'll be taxed on worldwide income for the entire 2015, but I believe I will be able to claim a foreign tax credit for the income tax I already paid in Portugal for 2015 income, to avoid double taxation. Is this correct? Which of these 2 options would generally more advantageous for us?

2 - Regarding my children, where you say "If they will become resident aliens in 2015", do you mean 2016? By my calculations, my children will only meet the SPT by May 15 2016, but by then I guess I will already have had to file my tax return, so I don't understand the timing - how will I be able to claim them as dependents and claim the child tax credit if by the time I have to submit my tax return they didn't yet meet the SPT? I read something about Form 4868 in Pub 519, but it is not entirely clear to me. Does it mean I can delay my tax return until my children meet the SPT so I can make the first year choice for them for 2015 and then treat them as dependents for 2015?

3 - When will I be able to claim allowances for my children on my form W-4? Only when they meet the SPT in 2016?

Thanks for your help.

[dwarak1985]

I am facing the exact  same situation for 2016. Please let me know if you have a response for this?

[nuno-viegas-lope]

Hi. I ended up asking for an extension and then filing a normal tax return as residents (since we all passed the Substantial Presence Test).

[varshil_shh]

I have a similar situation in the year 2020. I am on L1 visa & my wife & child are on L2 visa. As per the Substantial Presence Test me and my wife are resident alien considering our presence in the previous years(2019, 2018, 2017), but our child travelled to the US for the very first time on 19th Sept,2020 (born in 2020). I have a couple of questions : 

1) Will i be able to claim my child as dependent for child tax credit ? As per the definition of "first year choice" in pub 519, I believe I can claim them dependent once my child pass the SPT in 2021 which will be on 26th May,2021. So I'll have to apply for a filing extension and file for my taxes post 26th May,2021. Can you please confirm ?

2) My child still do not have an ITIN (I am planning to apply one along with my returns with w7). Will i be able to claim for the stimulus fund credit(recovery rebate credit) for my child ?

@nuno-viegas-lope @bine22 

[DavidD66]

nuno-viegas-lope If your children are not citizens or resident aliens (which they are not based upon the information you provided, they do not qualify for the Child Tax Credit or the Credit for Other Dependents.  For more information, see:  

Child Tax Credit  &  Credit for Other Dependents

You can claim your child as a dependent, but you your child will not qualify for the Child Tax Credit, as a qualifying child for purposes of the child tax credit is a child who, among other things: Has an SSN valid for employment issued on or before the due date of your 2020 return (including extensions).

Your child may qualify for the Credit for Other Dependents. To claim the credit for other dependents, your dependent must have an SSN, ITIN, or ATIN issued on or before the due date of your 2020 return (including extensions). For more information, see Publication 972 - Child Tax Credit and Credit for Other Dependents

Your child does not qualify for the Stimulus payment under the CARES  Act which was passed in March of 2020, but should qualify for the stimulus under the Coronavirus Aid Package passed in December of 2020.