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Topic: Child Tax Credit (US)  (Read 1418 times)

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Child Tax Credit (US)
« on: January 20, 2010, 02:29:42 PM »
Okay, my husband will not stop pestering me about this and I can't find anything online in plain English that answers my question, so I figure someone here must know the answer from personal experience. Basically, we want to know if we will receive the child tax credits when we file our US taxes this year. Details below:

-I'm non-working, a US citizen, and have lived in the UK since November 2008.
-My husband is a UK citizen and has worked full-time in the UK since February 2009.
-We have 2 children together, ages 10 months and 2.5 years.
-Our income (in USD) does not exceed $30,000.
-My husband was a green card holder from July 2007-November 2008.

I understand that we need to file taxes and that's fine. We filed last year as well because my husband worked in the US from September 2007-August 2008. I'm just trying to figure out what to expect when we file this year, especially regarding that child tax credits. When I plug in our income (converted to $) on TurboTax's online calculator, it shows a pretty substantial child tax credit (around $7,000). Last year we got about $3000, I think, when we filed for our son (daughter wasn't born yet), but that was based on my husband's income in the US, so I don't know if the same will go for this year.  Thanks to anyone who might have some insight!  If you know of some links that put it in plain English, that'd be even better!!

Edited to add: Exactly what forms do we need to file? I'm kind of unclear on this too.
« Last Edit: January 20, 2010, 02:43:00 PM by brokensemaphore »
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Re: Child Tax Credit (US)
« Reply #1 on: January 20, 2010, 09:20:51 PM »
I would expect zero refund as you have zero income.

You would have filed separate returns for 2008 as your husband was a non-resident alien at the end of 2008 UNLESS you  jointly elected under section 6013(g) to file joint returns.

If you made a 6013(g) election this continues for ever unless revoked by either spouse.  If revoked you can never file jointly again with the same non-resident alien spouse.

If you have elected then you would report worldwide income for him including of course child benefit, ISAs, UK pension plans etc...I expect you are jointly receiving UK child tax credits and working tax credits and these of course would also be reportable as income in the US.

You will also need to consider if any US refund is taxable in the UK on your UK returns.
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Re: Child Tax Credit (US)
« Reply #2 on: January 20, 2010, 10:10:59 PM »
For 2008 last year, we filed jointly as married. We planned to just continue filing jointly as married and were going to report all UK income (wage, child benefit, tax credits, etc.) when we filed our US taxes. So would that mean we would get the child tax refund from the US? I'm still not quite clear on that.
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10/12/08: Completed and submitted online application for UK spousal visa
10/14/08: Biometrics done (as a walk-in a day early)
10/15/08: Visa application package sent to courier overnight
10/16/08: Application received by courier and delivered to Chicago consulate
10/20/08: Called courier to ask about delays, told it was approved!!
10/21/08: Visa in hand.  Date issued 10/18/08
11/19/08: Flight to Leeds!
3/18/14: Checking service appointment for naturalisation
4/19/14: Naturalisation approved
5/15/14: Citizenship ceremony

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Re: Child Tax Credit (US)
« Reply #3 on: January 26, 2010, 04:07:35 PM »
*crickets chirp*

Does aaaaanybody have any ideas on the child tax credit issue? Surely someone here is a US/UK couple with children who haven't worked in the US for the previous tax year at some point who can provide their experience!  And any insight on which forms I need to file in the first place?
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10/12/08: Completed and submitted online application for UK spousal visa
10/14/08: Biometrics done (as a walk-in a day early)
10/15/08: Visa application package sent to courier overnight
10/16/08: Application received by courier and delivered to Chicago consulate
10/20/08: Called courier to ask about delays, told it was approved!!
10/21/08: Visa in hand.  Date issued 10/18/08
11/19/08: Flight to Leeds!
3/18/14: Checking service appointment for naturalisation
4/19/14: Naturalisation approved
5/15/14: Citizenship ceremony

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Re: Child Tax Credit (US)
« Reply #4 on: January 26, 2010, 09:28:34 PM »
Quote from: brokensemaphore on January 20, 2010, 10:10:59 PM
For 2008 last year, we filed jointly as married. We planned to just continue filing jointly as married and were going to report all UK income (wage, child benefit, tax credits, etc.) when we filed our US taxes. So would that mean we would get the child tax refund from the US? I'm still not quite clear on that.

This quote implies that you failed to file an election that the law required under section 6013(g) but also indicates that your husband may have failed to file Form 8854, so one cannot tell what is lawful in your situation.

Tax law is complex, so you do need to learn the rules by getting a good book on it (Lassers or Ernst & Young are good) and then seek professional advice given your complex situation.
« Last Edit: January 26, 2010, 10:53:16 PM by guya »
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Re: Child Tax Credit (US)
« Reply #5 on: January 26, 2010, 09:44:03 PM »
Maybe I'm reading this wrong (http://www.irs.gov/instructions/i8854/ch01.html), but I don't see why that form would be required at all. This says that long-term residents need to file if they spent 8+ years in the US. My husband was there for less than 3, and only had his green card for 1.5 years of it. Maybe I'm misunderstanding you, but I'm failing to see how any of the things in your last reply are relevant to our situation. I'm especially confused because in the other tax thread I wrote, you said that you didn't know why we wouldn't want to file as you suspected we would be eligible for child tax credits.

Your quote:
Quote
You probably want to re-read the rules for the refundable child credits and making work pay credits because I can't believe you get nothing!
http://talk.uk-yankee.com/index.php?topic=60094.0
« Last Edit: January 26, 2010, 09:48:27 PM by brokensemaphore »
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10/12/08: Completed and submitted online application for UK spousal visa
10/14/08: Biometrics done (as a walk-in a day early)
10/15/08: Visa application package sent to courier overnight
10/16/08: Application received by courier and delivered to Chicago consulate
10/20/08: Called courier to ask about delays, told it was approved!!
10/21/08: Visa in hand.  Date issued 10/18/08
11/19/08: Flight to Leeds!
3/18/14: Checking service appointment for naturalisation
4/19/14: Naturalisation approved
5/15/14: Citizenship ceremony

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Re: Child Tax Credit (US)
« Reply #6 on: January 26, 2010, 10:56:33 PM »
I suggest you read IR Code Section 877A which covers your husband's situation exactly plus Code Section 6013(g).

Your interpretation of 877A and thus Form 8854 is seemingly different from that of the IRS. 
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Re: Child Tax Credit (US)
« Reply #7 on: January 26, 2010, 11:00:30 PM »
Can you please just put this in plain English? I mean, I appreciate that you're trying to help, but I have no idea what to even begin to look for. I quoted exactly what the IRS web site says regarding former residents and filing the 8854. If you can show me on the link about the 8854 where I'm "interpreting it differently," I'd be happy to see.
Logged
10/12/08: Completed and submitted online application for UK spousal visa
10/14/08: Biometrics done (as a walk-in a day early)
10/15/08: Visa application package sent to courier overnight
10/16/08: Application received by courier and delivered to Chicago consulate
10/20/08: Called courier to ask about delays, told it was approved!!
10/21/08: Visa in hand.  Date issued 10/18/08
11/19/08: Flight to Leeds!
3/18/14: Checking service appointment for naturalisation
4/19/14: Naturalisation approved
5/15/14: Citizenship ceremony

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Re: Child Tax Credit (US)
« Reply #8 on: January 29, 2010, 01:19:11 PM »
Also, here is another quote from you to someone else that alludes to getting child tax credits from the US without any US income (and based totally on a UK citizen's earnings in the UK who is married to a US citizen):
Quote
Even though this may not apply to you right now; folks on low wages who have children can claim refundable child tax credits from the IRS on their US tax returns (in addition to UK child benefit and UK tax credits), so if you are in these circumstances you will find it pays yu to file.
http://talk.uk-yankee.com/index.php?topic=30822.msg399749#msg399749

Just wondering what's different to make this not apply to us. My husband being a former green card holder seems to really be the only difference, and that would just mean that he has to file (will be anyway), so a bit of a moot point.

ETA: And again in this post http://talk.uk-yankee.com/index.php?topic=34911.0 you state that you can get child tax credits in the same position.
« Last Edit: January 29, 2010, 04:22:26 PM by brokensemaphore »
Logged
10/12/08: Completed and submitted online application for UK spousal visa
10/14/08: Biometrics done (as a walk-in a day early)
10/15/08: Visa application package sent to courier overnight
10/16/08: Application received by courier and delivered to Chicago consulate
10/20/08: Called courier to ask about delays, told it was approved!!
10/21/08: Visa in hand.  Date issued 10/18/08
11/19/08: Flight to Leeds!
3/18/14: Checking service appointment for naturalisation
4/19/14: Naturalisation approved
5/15/14: Citizenship ceremony

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  • Location: West Yorkshire
Update
« Reply #9 on: May 12, 2010, 09:37:32 AM »
Just an update on this post:
It turns out that I was correct! I filed the 1116, 1040, and 8812 and we did indeed qualify for and receive the $2,000 in child tax credits for our two children. I didn't use TurboTax because it was very insistent on the 2555, which was not going to be beneficial to us at all, so I wound up doing it all by hand by mail. God bless the IRS  :P
Logged
10/12/08: Completed and submitted online application for UK spousal visa
10/14/08: Biometrics done (as a walk-in a day early)
10/15/08: Visa application package sent to courier overnight
10/16/08: Application received by courier and delivered to Chicago consulate
10/20/08: Called courier to ask about delays, told it was approved!!
10/21/08: Visa in hand.  Date issued 10/18/08
11/19/08: Flight to Leeds!
3/18/14: Checking service appointment for naturalisation
4/19/14: Naturalisation approved
5/15/14: Citizenship ceremony

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