Just like a US citizen who resides in the US, an Expat is eligible to receive CTC child tax credit, and ACTC additional child tax credit. The difference between these two is simple, the first is non-refundable whilst the second is.
Your eligibility for these credits is dependent on a number of factors. Here is a guide to help you determine your eligibility.
CTC can be up to $2000 per qualifying child. If you earn above $400,000 the credit will begin to phase out and be reduced by 5% of your income Adjusted Gross Income over the $400,000 threshold. For single filers the threshold is $200,000.
The 2017 Tax Cuts and Jobs Act (TCJA) grants a $500 nonrefundable credit for dependents who do not qualify for the child tax credit, for example, children who are over 16 and therefore cannot qualify for the child tax credit or non-child dependents.
Additional Child Tax Credit is the refundable portion of the child tax credit which exceeds the taxes owed. If the taxes due are higher than the CTC, there will be no ACTC.
You can receive a refund of up to $1,400 for every qualifying child. How much ACTC you can receive is calculated by knowing the amount of remaining child tax credit after reduction of taxes owed (up to $1,400 per child), and 15% of earned income amounts over $2,500. Earned income is employee wages or earnings from self-employed business income. The lower of these two amounts is the sum that you can claim as a refund.
The income of a Non-Resident Alien spouse can be included if the spouse applies for
an Individual Tax Identification Number (ITIN) and makes a Section 6013 (g) election by the filing deadline of the return (including extensions).
Earned income that is excluded via the Foreign Earned Income Exclusion for either the taxpayer or spouse cannot be included. Married filers could file separate income tax returns in order to allow one spouse to take the Foreign Earned Income Exclusion and the other spouse to apply for the additional child tax credit. (This spouse can utilize foreign taxes paid to reduce US taxes due, resulting in a larger ACTC).
Other variables may reduce the Additional Child Tax Credit refund such as US sourced passive income, self-employment tax, net investment income tax, and alternative minimum tax. You can claim the refund up to three years after the due date of your return.
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