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Connect on LinkedInBeing an expat with kids comes with a unique set of challenges. Everyday expat hurdles—like navigating visas, schools, and healthcare—are multiplied when you add dependent little humans to the mix. However, when it comes to U.S. taxes, having children can bring valuable tax benefits. One of the biggest is the Child Tax Credit.
If you qualify, it can lower your U.S. tax bill and sometimes even lead to a refund—but for expats, the way you file often decides whether you actually see that money.
So what does the Child Tax Credit look like in 2026, who qualifies, and why do plenty of expat families qualify on paper but still get little (or nothing) back? Let’s break it down.
📋 Key Updates for 2026
- For 2025 returns filed in 2026, the Child Tax Credit is up to $2,200 per child, with up to $1,700 refundable (ACTC).
- For tax year 2025 onward, a child must have a valid SSN issued by the return due date (incl. extensions) to claim the CTC/ACTC.
- If you claim the ACTC, the IRS can’t release refunds before mid-February 2026 (it holds the whole refund).
What is the Child Tax Credit?
The Child Tax Credit (CTC) is a federal tax credit that reduces your federal tax liability. Think of it like a per-child tax break designed to help families offset the cost of raising children under the age of 17. The credit’s current structure comes from the Tax Cuts and Jobs Act, and the value you actually get can vary by filing status.
For each qualifying child, the IRS lets you subtract up to a set amount directly from the federal income tax you owe. If your tax bill is high enough, this can significantly reduce what you pay. In some cases, part of the credit can be refunded to you as cash.
For U.S. expats, the eligibility rules are mostly the same as for stateside taxpayers. However, expat-specific factors, like the Foreign Earned Income Exclusion (FEIE) or the Foreign Tax Credit (FTC), can affect whether the credit is usable or refundable.
At its core, the Child Tax Credit is meant to:
- Lower your U.S tax bill dollar-for-dollar, meaning that every $1 of Child Tax Credit directly reduces your federal income tax by $1 (unlike deductions, which only reduce the income you’re taxed on).
- Provide partial tax refunds to eligible taxpayers with low or no U.S. tax owed.
- Provide financial support for families with qualifying dependent children.
The catch? Not all expats qualify for the refundable portion.
Who qualifies for the Child Tax Credit?
To claim the Child Tax Credit, both you and your child must meet specific IRS requirements:
The child must:
- Be under age 17 at the end of the tax year
- Be your child, stepchild, foster child, sibling, or descendant
- Have lived with you for more than half the year
- Be claimed as your dependent
- Be a U.S. citizen, U.S. national, or U.S. resident alien
- Have a valid Social Security Number (SSN) (an ITIN does not qualify)
You must:
- File a U.S. federal income tax return (Form 1040)
- Claim the child as a dependent
- Meet income eligibility requirements
How much can you get from the Child Tax Credit in 2026?
For the 2026 tax year, the Child Tax Credit is worth up to $2,200 per qualifying child. However, not all of that amount is automatically refundable. The credit is split into two parts:
- Up to $2,200 total per child can be used to reduce your U.S. tax bill.
- Up to $1,700 of that amount may be refundable, known as the Additional Child Tax Credit (ACTC).
However, the full credit isn’t available to everyone. The credit begins to phase out once your adjusted gross income (AGI) exceeds certain thresholds.
- $200,000 for single filers
- $400,000 for married couples filing jointly
These limits apply whether you live in the U.S. or abroad.
💡 Pro Tip:
Even if your U.S. tax liability is zero, you may still qualify for a refund if you meet the requirements for the refundable amount – but expat filing choices matter a lot here.
Refundable vs. nonrefundable Child Tax Credit
When you’re trying to determine where you stand with the Child Tax Credit, understanding the difference between refundable and nonrefundable credits is key.
Nonrefundable Child Tax Credit:
- Can only reduce your U.S. tax liability to zero (if you don’t owe federal income tax, this portion of the credit can’t be used or refunded).
- If you don’t owe federal income tax, this portion can’t be used or refunded
Refundable Child Tax Credit:
- Can result in a cash refund
- Calculated based on earned income reported on your return
- Unavailable if all earned income is excluded using the Foreign Earned Income Exclusion (FEIE)
For example, if you have two qualifying children, you may be eligible for up to $4,000 in Child Tax Credits. But if all of your income is excluded using the FEIE, the refundable portion won’t apply, meaning no cash refund is issued, even though you technically qualify.
How the Foreign Earned Income Exclusion affects the Child Tax Credit
If you use the Foreign Earned Income Exclusion (FEIE), you may be excluding all of your earned income from U.S. taxation. While that can significantly reduce your U.S. tax bill, it comes with a downside.
When you exclude all of your earned income from the FEIE, it doesn’t count toward refundable credit calculations. As a result, the IRS treats you as having no qualifying earned income for the ACTC (which is why many expats qualify for the federal Child Tax Credit on paper but receive no refund).
💡 Pro Tip:
Many expat families benefit more from using the Foreign Tax Credit instead of FEIE, especially when children are involved.
Foreign Tax Credit vs. FEIE (and why the choice matters)
Unlike the FEIE, the Foreign Tax Credit (FTC) does not remove income from your U.S. return. Instead, it offsets the U.S. tax with foreign taxes you’ve already paid
This means you may still:
- Show earned income on your U.S. return
- Qualify for the refundable tax credit amount of the Child Tax Credit
- Avoid double taxation while preserving refund eligibility
For expats living in higher-tax countries, choosing the FTC often works in your favor.
💡 Pro Tip:
Switching from FEIE to the FTC isn’t always automatic. Timing, prior filings, and IRS rules matter, so seek advice before changing strategies.
Can self-employed expats claim the Child Tax Credit?
Short answer: yes. But it can get a tad bit more complex.
Self-employed expats:
- Must calculate net earned income
- May owe U.S. self-employment tax (even if income tax is reduced)
- Can sometimes unlock refundable credits by properly reporting earned income
Self-employed expats may also need to factor the Child Tax Credit into quarterly estimated taxes. Because the IRS expects taxes to be paid throughout the year, credits can reduce how much you need to send in each quarter.
Failing to account for credits can lead to overpaying during the year or underpayment penalties later on, both of which affect your cash flow and bank account.
Why do some expats get nothing, even when eligible?
If you’re a U.S. expat and qualify for the Child Tax Credit but didn’t receive a refund, there are a few possible causes:
- All earned income was excluded using the FEIE
- U.S. tax liability was already reduced to zero
- Refundable eligibility requirements weren’t met
When you don’t receive a refund, it doesn’t necessarily mean that you filed incorrectly. Oftentimes, it means the interaction of credits and exclusions worked against you.
💡 Pro Tip:
A zero refund doesn’t mean there’s no opportunity; it means a different tax preparation and filing strategy could help next year.
How the Child Tax Credit differs from other family tax credits
The Child Tax Credit isn’t the only family-related tax benefit in the U.S. tax system, but it’s often the most relevant for expat families with young children.
For example, the Earned Income Tax Credit (EITC) is based on earned income, and it is generally unavailable to expats since you have to live in the United States and can’t claim the credit if you use the Foreign Earned Income Exclusion (FEIE). Another example is the Credit for Other Dependents (ODC), which applies to older children or relatives, but offers a smaller, nonrefundable credit.
For most U.S. expat families with young children, the Child Tax Credit is the primary federal tax credit available.
How to plan ahead as an expat parent
Because the Child Tax Credit interacts with things like the FEIE, the Foreign Tax Credit, and self-employment tax, small filing mistakes can mean delayed refunds, reduced credits, or an IRS notice you didn’t ask for. If you have qualifying children and live abroad, a little proactive planning goes a long way.
If you’re not sure you’re getting the best result, Bright!Tax can help you choose the right approach and file cleanly—so you don’t leave money on the table or accidentally block the refund you expected.
Frequently Asked Questions
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Does the Child Tax Credit apply to children under age 17?
Yes. To qualify for the Child Tax Credit, your child must be under 17 at the end of the tax year. Once a child turns 17, they no longer qualify for this credit. But you may still be eligible for the credit for other dependents (COD), which is smaller and nonrefundable.
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Is the Child Tax Credit available to low-income expats?
It depends. Some low-income expats may qualify for the refundable portion of the Child Tax Credit, but only if they report earned income on their U.S. tax return. If all income is excluded using the Foreign Earned Income Exclusion (FEIE), the Internal Revenue Service (IRS) does not consider that income when calculating refund eligibility.
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What was the Advance Child Tax Credit?
The Advance Child Tax Credit refers to the monthly payments issued in 2021 under a temporary pandemic relief program. Those payments allowed eligible families to receive part of the credit in advance, often via direct deposit to a bank account.
That program has ended. As of 2026, there are no advance or monthly Child Tax Credit payments available.
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What was the Expanded Child Tax Credit?
The Expanded Child Tax Credit was a temporary change created by the American Rescue Plan Act in 2021. It increased the credit amount, made it fully refundable, and removed many income limitations.
These rules were short-lived and no longer apply. The Child Tax Credit has since returned to its standard structure, with limited refundability and stricter eligibility requirements.
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Is the Child Tax Credit the same as the Dependent Care Credit?
No. The Child Tax Credit helps offset the cost of raising qualifying children, while the Dependent Care Credit applies to childcare expenses incurred so you can work or look for work.
They are separate credits with different rules, and some expat families may qualify for one, both, or neither, depending on their circumstances.
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How does the IRS pay Child Tax Credit refunds?
If you qualify for a refund, the IRS typically issues it the same way as other tax refunds – either by direct deposit to your bank account or by paper check – depending on how you file your return.
