# Revoke FEIE to receive ACTC?



## Barbarossa026 (Jun 10, 2020)

For many years my wife (US Citizen) has filed her tax returns claiming FEIE. Initially with form 2555EZ, later the standard form 2555 when EZ was not available anymore. Filing was and still is pretty straight forward: married status MFS, wife has salary income way below the FEIE threshold and very limited interst on a savings account. No assets in nor income from US. We live in the Netherlands and I am non-US citizen.

Now I'm reading more and more about FTC as an alternative for FEIE. For us this could be interesting (or so it seems) as we have now have children. The FTC reduces the tax owed to 0 and hence she as US citizen living outside the US would get a refund of $1400 per child. This seems almost too good to be true. Or is it?

Would appreciate your views and comments.


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## Bevdeforges (Nov 16, 2007)

There are two things to consider here: the EIP (the so-called "stimulus" payments related to the Covid pandemic), and the new Child Tax Credit, which has been passed into law with the hope of making it permanent, but for now it will only apply for one year. 

If your wife revokes her election for the FEIE, she can't go back to using it again for a few years and may require IRS "permission" to return to it.

For both the EIP (Economic Impact Payment) and the new Child Tax Credit, the taxpayer has to have claimed the children as her dependents on the 2019 return or the 2020 return - and for this they need to have US social security numbers. The EIP checks are being mailed out as we speak - though checks coming to Europe seem to be taking a good month or so to arrive. The Child Tax Credit basically affects the 2021 tax return, but they are looking to make "advances" on the credit amount in the latter half of 2021 in anticipation of the taxpayer's filing their 2021 return (in early 2022). 

This article might help explain some of the details: Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs | Kiplinger


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## Barbarossa026 (Jun 10, 2020)

Thank you - the EIP is indeed a separate topic. What I'm looking at is the Additional Child Tax Credit (the refundable part) currently in place. This was increased in 2017 to max $1,400 (refundable).

The question is then (besides indeed the fact she can't go back using FEIE within 5 years): is there any catch for an expat with non-USC spouse married filing separately receiving this refund? You'd expect that many expats with children would make the change from claiming FEIE to using FTC just to get this refund?


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## Bevdeforges (Nov 16, 2007)

Take a look at that article I linked to. One of the big changes to the Child Tax Credit in the recent bill that was passed for Covid relief is that the amount has been increased (to $3600 or $3000 per child) and there is no more minimum taxable income requirement. Take a look at the article for details, but it may be available even for those filing with the FEIE.


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