Additional Child Tax Credit

I filed married filing jointly with my British husband.  We lived the entire year outside of the USA and all of our income was foreign earned.  We used the foreign earned income exclusion, so had no earned income and owed no tax to the USA (I think I'm explaining that correctly, we are below the threshold, so owe nothing.)  I received a letter in the post from the IRS saying that we may be owed the Additional Child Tax Credit (we have two dual USA/UK citizen children).  Is this possible? Or as I earned no income because of the  FEIE, then I am unable to claim this? 

I thought as my income is 'zero' with income exclusion we didn't quality for any of this but would be pleasantly surprised if I were incorrect (which is highly likely when it comes to taxes!!)

Hello,

With regards to your question, yes, you may still qualify for the credit (or a portion of the credit) even if you have zero taxable income.

According to the IRS, the additional child tax credit is specifically for individuals who get less than the full amount of the child tax credit. "The additional child tax credit may give you a refund even if you do not owe any tax".

In order to know for certain whether you will be able to claim a refund, you will have to fill out the Child Tax Credit worksheet. The worksheet and instructions can be found on this page:

http://www.irs.gov/publications/p972/ar02.html#en_US_2013_publink100012090

I hope this helps and hopefully you can get a bit of a refund!

Is this true if you file alone (husband is UKC) too?

I don't earn much so haven't filed but we have kids, would they hand us money for free?

kintheuk has said that she and her NRA husband have both made a valid election to file joint US income tax returns (this is incidentally an unusual choice).

Whether or not this election is made the standard technique each year is to compare between the overall US and UK tax effects of claiming the foreign earned income exclusion.

Paying US tax is not a pre-requisite for obtaining a social security benefit designed for lower earning parents.

My UKC hubby has lived in the US with me for the past 3 1/2 years. We are making the big move over to the UK in 2 weeks so I have been reading all that I can for next year's taxes. We file jointly here and he has a US Social Security # as he's been a resident for the past 3 years.

Thank you for posting this question as I was assuming we wouldn't have to do much as far as filing goes. I have 3 children I claim so appreciate the information.

First off, thank you very much for the helpful replies! I didn't think I could actually file for this but am happy to give it a go, especially as the IRS sent me a letter and say they will let me know why I don't qualify for it!

It is my understanding (and my understanding of US tax code/law is quite limited, just asked a few questions on here!!) is that I made a mistake with regarding how I filed when I first started filing as a married person over here 10 years ago.  I didn't realise that I could file married separately, so I got him an ITIN, filed jointly and then did this.  I understood that once I've made that choice, I have to do this or go through a somewhat difficult procedure to stop.  From what I read recently, as I never formally agreed to do this (send a letter to the IRS saying why I was doing this?) there was some legal case where I supposedly could change back to filing separately, but I was worried that this might flag it up and I didn't want to get audited or something.  The more I type, the more I think I probably should have spoken to someone.....arghhhh......

Our income will never be over the threshold unless we win the lottery or completely change our chosen professions, so hopefully I'm doing this okay!!