What is the Child Tax Credit?

Updated on December 10, 2025

Rose-ann De Villa, an IRS Enrolled Agent and CPA with 15 years of expat tax experience, specializes in US tax preparation, tax planning, and tax advice for US citizens and Green Card holders living and working in the UK.

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The Child Tax Credit (often shortened to CTC) can be worth up to US$2,200 per qualifying child under age 17. Part of this can be refundable through something called the Additional Child Tax Credit (ACTC), which can refund up to US$1,700 per child, if you meet the income and other requirements.

You can claim the Child Tax Credit on your Form 1040. As a US expat, you use the same basic rules as someone living in the States, but you have extra moving parts, such as foreign income, foreign tax credits, and local benefits in your country of residence; for example, let’s compare the UK and US child tax credit systems.

How does the UK child tax credit compare to the US child tax credit?

The UK Child Tax Credit and the US Child Tax Credit sound similar, but they are completely different systems. One belongs to the UK welfare and benefits system, the other belongs to the US tax system.

In short:

The UK Child Tax Credit was a means-tested benefit paid to families through HMRC. It did not reduce UK tax directly.
The US Child Tax Credit is a US federal tax credit that reduces your US tax bill and may create a refund through the Additional Child Tax Credit.

Both try to support families with children, but they work in different ways and are not linked together.

Is the UK Child Tax Credit still available in 2026?

Not anymore, technically. The UK has been closing the old tax credit system and replacing it with Universal Credit. The old Child Tax Credit and Working Tax Credit are being fully phased out, and new claims generally move to Universal Credit instead. Universal Credit includes child elements that replace the old Child Tax Credit support.

There are also policy changes around the old “two-child” cap for certain benefits, which the UK is in the process of removing, so some families will see more support from Universal Credit going forward.

If I receive UK Child Tax Credit or Universal Credit, does it change my US Child Tax Credit claim?

In most cases, no. The US Child Tax Credit is based on US law. It looks at:

Whether you have a qualifying child
Your income level and filing status
Whether you file a US return and meet all the Child Tax Credit rules

The fact that the UK government paid Child Tax Credits in the past, or Universal Credit now, does not block the US Child Tax Credit. They are separate systems.

Where you do need to pay attention as a US expat is:

How your foreign income is reported on your US return.
Whether UK benefits are taxable or reportable under US rules.
Whether your US income, after everything is calculated, still allows you to benefit from the refundable Additional Child Tax Credit.

Who qualifies for the US child tax credit (dependent and age rules)?

For 2026, the child must be:

Under 17 at the end of the year (so 16 or younger on December 31, 2026)

If your child turns 17 in 2026, you can’t claim the Child Tax Credit for that child, but you may be able to claim the Credit for Other Dependents instead.

What relationship does the child need to have with me?

The child must be related to you in one of these ways:

Son or daughter
Stepchild
Foster child placed with you by a court or authorized agency
Grandchild (a descendant of your child)
Brother, sister, stepbrother, stepsister
Niece, nephew, or another descendant of your sibling

Does the child have to live with me if I am abroad?

Yes, there is a residency test, but it is flexible for real life:

The child normally must live with you for more than half of the year
Short absences, such as trips, temporary schooling, or hospital stays, usually still count as living with you

This applies whether you live in the US or overseas. If your family lives together abroad, your child can still meet the residency test.

Do I have to claim the child as a dependent to get the Child Tax Credit?

Yes. The child has to be a dependent on your US return. That generally means:

The child is a qualifying child under IRS rules
They provide less than half of their own financial support during the year
The child is not filing a joint return with a spouse, unless it is just to claim a refund

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What are the child tax credit income limits and phaseouts?

The Child Tax Credit is not unlimited. At higher income levels, the amount you can claim is reduced.

What are the income limits for the Child Tax Credit in 2026?

For tax year 2026, you can usually claim the full Child Tax Credit if your modified adjusted gross income (MAGI) is at or below:

US$200,000 if you file as Single, Head of household, or Qualifying surviving spouse
US$400,000 if you are Married filing jointly

As a US expat, your MAGI is still calculated on your US return. It is based on your worldwide income, adjusted by a few specific rules.

What happens once I go over the income limit?

This is where the child tax credit income limits and phaseout explained becomes important. When your MAGI goes above the limit for your filing status, your Child Tax Credit is reduced.

The phaseout works like this:

For every US$1,000 (or part of US$1,000) that your MAGI is over the threshold, your total Child Tax Credit is reduced by US$50

Here is a simple example to show the idea.

You are married filing jointly with two qualifying children
Your MAGI is US$420,000
The threshold is US$400,000, so you are US$20,000 over
You divide US$20,000 by US$1,000 and get 20 blocks
20 × US$50 = US$1,000 of phaseout

Without any phaseout, two children would give you 2 × US$2,200 = US$4,400 of Child Tax Credit. After the US$1,000 reduction, you are left with US$3,400.

Does living abroad change how the phaseout works?

No. The phaseout rules are based on:

Your MAGI
Your filing status

They do not change just because you live outside the US. Whether you live in London, Dubai, Singapore, or still in the States, the same Child Tax Credit income limits apply. Being an expat mainly affects other parts of your return, such as foreign tax credits or the Foreign Earned Income Exclusion, but the phaseout formula is the same.

How do expat choices like the Foreign Earned Income Exclusion affect this?

For the phaseout itself, the important thing is the MAGI definition used for the Child Tax Credit. If you claim the Foreign Earned Income Exclusion, it can affect how your income is counted and how your MAGI is computed, but the threshold amounts do not change.

Is the child tax credit refundable or nonrefundable?

The Child Tax Credit is described as partially refundable. That means part of it is a nonrefundable credit, and part of it can be refundable through the Additional Child Tax Credit (ACTC). For expats, this is often just as important as the income limits.

What does “nonrefundable Child Tax Credit” actually mean?

The main Child Tax Credit, up to US$2,200 per child, is nonrefundable. In practical terms, that means:

It can reduce your US tax bill down to zero
It cannot by itself give you a refund if you already owe no US tax

For example, suppose your total US tax before credits is US$1,500, and your Child Tax Credit is US$2,200. The nonrefundable credit can cut your tax from US$1,500 to zero, but it will not automatically pay you the extra US$700 as a refund.

How do I actually get money back from the Child Tax Credit?

This is where the Additional Child Tax Credit (ACTC) comes in. The ACTC is the refundable part. For 2026:

The total Child Tax Credit is up to US$2,200 per qualifying child
Up to US$1,700 per child can be refundable as ACTC if you qualify

If you meet the rules, the ACTC can pay you money even after your regular Child Tax Credit has already reduced your tax bill to zero.

Here is how it usually works:

You calculate your Child Tax Credit based on your children and income.
The nonrefundable part reduces your US tax bill.
If there is still unused credit and you have enough earned income, the refundable part, the ACTC, can pay you a refund of up to US$1,700 per child.

How does this work differently for US expats?

For US expats, the way you handle your foreign income can change how much of the refundable credit you can use.

A few points to keep in mind:

If you rely heavily on the Foreign Earned Income Exclusion, the income you exclude often does not count as earned income for ACTC purposes. This can reduce or eliminate your refundable Additional Child Tax Credit.
If you instead use the Foreign Tax Credit on Form 1116, your foreign wages are usually still treated as earned income on the US side, which can help you qualify for the refundable ACTC.

Do I need my child’s SSN for the child tax credit, and can I claim it if I live abroad?

The Social Security Number is one of the strict rules for the Child Tax Credit. This is something many US expat parents only discover when they try to file and suddenly see their credit denied.

Do I need my child’s SSN for the Child Tax Credit?

Yes, you do. To claim the Child Tax Credit:

Your child must have a valid Social Security Number (SSN) that is valid for work in the US.
The SSN has to be issued by the due date of your tax return, including any extensions.
An ITIN is not enough for the Child Tax Credit. If your child only has an ITIN, they will not qualify you for this specific credit, although you might still qualify for the Credit for Other Dependents.
You and your spouse (if you file jointly) also need valid SSNs.

How do I get an SSN for a child born outside the US?

If your child was born abroad, this is a very common expat issue. The usual process looks like this:

You register the birth with the US embassy or consulate and apply for a Consular Report of Birth Abroad (CRBA) and a US passport, if your child qualifies for US citizenship.
At the same time, or in a follow up appointment, you apply for your child’s SSN through the consulate or embassy.

Since this can take a bit of time, it is usually better to start early rather than rushing right before the tax deadline.

Can I claim the Child Tax Credit if I live abroad?

Yes. Living outside the US does not stop you from claiming the Child Tax Credit. The credit is tied to your status as a US taxpayer and your qualifying children, not to where you live.

To claim the Child Tax Credit as a US expat, you generally need:

A qualifying child under age 17 at the end of the tax year
A valid SSN for that child
The child must meet the relationship, residency, and support tests
You must be able to claim the child as your dependent
Your income must fit within the Child Tax Credit income limits and phaseout rules for that year

What if my child gets an SSN after I already filed without the credit?

If your child was eligible but did not have an SSN at the time you filed, and you later obtain the SSN, you can usually file an amended return (Form 1040-X) for open years and add the Child Tax Credit.

Who claims the child tax credit for separated or divorced parents (tie-breaker rules)?

In general, the custodial parent has the first right to claim the child as a dependent and take the Child Tax Credit. The custodial parent is usually defined as the parent with whom the child lives for more nights during the year.

So, if your child spends more nights with you than with your ex, you are usually the custodial parent, and you normally get to claim:

The child as your dependent
The Child Tax Credit, as long as all the other rules are met

Can the noncustodial parent ever claim the Child Tax Credit?

Yes. The custodial parent can release the right to claim the child as a dependent to the noncustodial parent. This is usually done through:

Form 8332 (Release/Revocation of Release of Claim to Exemption) or a similar statement that meets IRS requirements
The noncustodial parent attaches that signed form to their tax return

If that is done correctly for the year in question:

The noncustodial parent may claim the child as a dependent and use the Child Tax Credit
The custodial parent might still claim other benefits like the Earned Income Tax Credit, depending on the situation, but they give up the Child Tax Credit for that year

What if our child spends exactly half the year with each parent?

If the child spends the same number of nights with each parent, the tie breaker rules apply. In this case, the IRS looks at income:

If both parents are the child’s parents and the child lived with each for the same amount of time, the parent with the higher adjusted gross income (AGI) generally wins the tie and claims the Child Tax Credit.

So, in a true 50/50 custody situation without a release form, the higher income parent normally gets to claim the child.

How do these rules work if I am abroad and my ex is in the US?

The rules are the same, but the facts are often more complex:

If your child lives with you abroad for most of the year, you are usually the custodial parent and, by default, you would claim the Child Tax Credit, assuming all other conditions are met.
If your child lives in the US with your ex for more nights during the year, your ex is probably the custodial parent and would usually claim the credit.

If you both agree that the noncustodial parent should claim the Child Tax Credit, a properly completed Form 8332 is needed, no matter which country each of you lives in.