Did you know that foreign income can qualify you to receive the child tax credit refund? Sadly, a misconception has caused many to have missed out on this.
As you may know, the special Enhanced child tax credit of 2021, which pays $3000/$3600 per child (without any need to show any income) is limited to those who lived in the US for 6 moths of the year.
However, the old rules of the child tax credit still apply for those outside the US, which bases the credit on earned income.
Foreign wages do qualify as earned income. For instance, wages which are summarized on an Israeli Form 106, UK Form P60, Canadian T4, etc. all qualify as regular earned income. These are all W-2 equivalents.
These wages are regular reportable income a US expat needs to report on their tax return.
Some have a misconception that only US based income can qualify as basis for the child tax credit, but this is wrong!
If you missed out in past years, returns can still be filed, going back to 2018, in order to receive refunds.
Contact me if you need any help with this process.
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