# US child tax credits while UK resident



## Confused expat (May 17, 2021)

Hi all,

Bit of background.....

Dual UK/US citizen living in the UK since 18, now 36
Two children born in UK but with US passports/SSNs with third on the way.
only filed my taxes once. Can’t remember the year but it was when they did stimulus checks after 2008 financial crash.
Married to a UK only citizen

Anyway, been reading about these child tax credit payments that are starting from July and was wondering.....

can you claim these payments when residing outside the US?
if so, what’s the best way.
just trying to work out if it’s worthwhile to start being compliant.


Ive also been reading about the fbar? declaration. In the last six years I’ve not had more than 9k in my bank account at any one time until this month. I currently have over £40k in there as I’ve just taken out a loan to pay for a house extension. How does this work on the fbar as it isn’t income or savings?

I could have this all wrong and it’s just easier to stay under the radar. Any advice is appreciated.


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## 255 (Sep 8, 2018)

Confused expat -- Yes, you qualify for the child tax credit (as long as the children are under 17 on 31 December.) The advance payments are made based on your prior year's tax return. Assuming you filed your 2020 tax return, to capture the stimulus payments, your first two children should get the advance payments. If your third is born in 2021, you'll be able to claim his/her credit, when you file your 2021 taxes (after you get his/her SSN.) Congratulations! .

As far as the FBAR, if all your accounts that you own, or had signature authority over, were under $10K, you had no filing requirement, for past years. On the FBAR, you only report the account's high value -- it doesn't matter what the money is, so income or savings is irrelevant. This is only an "information return," so no taxes owed. Also, you file online, so it is very easy.

Whether over $13,000 in free money is worth it to you, or over $9,000 annually, for the child tax credits, is your decision. The filing is pretty straight forward and if I were in your shoes, I would definitely take advantage of 10s of thousands of untaxed dollars. Cheers, 255


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## Nononymous (Jul 12, 2011)

Beat me to it. While it's perfectly sensible to stay off the radar, in this case the US is offering to throw a lot of free money at you.

For the stimulus benefit alone, with two kids, I think it would total out as high as $8200. ($1200 + 2 x $500 for the first payment, 3 x $600 for the second, 3 x $1400 for the third, plus maybe another $1400 for the newest arrival.) I might be wrong there, but if so, not off by much. Be careful you don't do married filing jointly with an NRA spouse, as that disqualified you from at least the first payment.

I don't know how the child tax credit now works. In the past you needed to earn a certain amount of income and use the FTC rather the FEIE to qualify, but it's all different now. Rumour has it you can ransom your child's anonymity for a quite sum.

If your children are UK-born dual citizens, be sure to have the UK parent handle all banking for them, so that there is no suspicion of their US-person status. Just because Uncle Sam is giving you piles of cash as a thank-you for producing little Americans, does not mean that your British kids should subject themselves to FATCA or future US tax compliance.


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## Ann477 (May 17, 2021)

Confused expat said:


> Hi all,
> 
> Bit of background.....
> 
> ...



I don't appreciate you using our tax dollars to subsidize your kids who don't live here. No shame I guess.


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## 255 (Sep 8, 2018)

Ann477 -- If you don't like our citizens taking their rightful share of benefits, codified in law -- consider who you vote for or better yet, run for office and try to effect laws that meet your standards. Please do not denigrate a U.S. citizen that might exercise their rights to help their family survive in these troubling times.

Unfortunately, it will take a lot of people, like you, to forgo your benefits to affect our gloated budget and get us out of bankruptcy. Cheers, 255


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## Nononymous (Jul 12, 2011)

Ann477 said:


> I don't appreciate you using our tax dollars to subsidize your kids who don't live here. No shame I guess.


There's one simple solution to this problem: put an end to citizenship-based taxation. Get on the phone and explain this to your congressperson.

If the US demands that its citizens file tax returns and even pay taxes despite not living in the US - in some cases without ever having lived in the US - then it can bloody well pay up when it offers benefits to US taxpayers. Yes some expats who've never owed a dime in US taxes will make a pile of money thanks to Congress not thinking this through. Oh well. Lucky them.


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## Aarabhi22 (Mar 23, 2021)

Confused expat said:


> Hi all,
> 
> Bit of background.....
> 
> ...




thanks for the information


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## Confused expat (May 17, 2021)

255 and nononymous, thanks for the info. I suppose another incentive to get compliant is that my siblings and I may shortly have a financial interest in a fledgling US business (which has created a dozen US jobs, Ann) so will need to be above board for that.


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## Confused expat (May 17, 2021)

Hi Ann,

It works both ways. I have to declare that I’m a US citizen when I open new financial accounts so the US can keep track of me. I have also discovered recently that many investment institutions won’t take my business because of extra regulations they have to deal with. Yes, I could fly under the radar but what if I did owe taxes and the IRS came for me? Technically, I’m not compliant with the law currently, it just seems becoming compliant has its benefits. UK banks have to play ball due to the pressure and penalties they receive from the government.

No shame whatsoever in fulfilling my legal requirements! 😂


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## Confused expat (May 17, 2021)

Further reading seems to suggest that if living overseas for more than six months of the year means only $1400 per child is refundable under the rescue act. Still worthwhile I think.









THE 2021 EXPANDED CHILD TAX CREDIT


This blog article focuses on another provision in ARPA – namely, the expanded 2021 child tax credit, which for reasons explained below, may have limited benefit for many U.S. expats.




expattaxprofessionals.com


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## Nononymous (Jul 12, 2011)

Confused expat said:


> Yes, I could fly under the radar but what if I did owe taxes and the IRS came for me?


Not that this is likely to be an issue, but be aware that the IRS can't really come after you in the UK. If you owed tens of millions they might try to extradite, but in terms of collecting ordinary bills they have no authority to mess with you or your bank accounts. US assets are fair game, however.


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## Moulard (Feb 3, 2017)

Ann477 said:


> I don't appreciate you using our tax dollars to subsidize your kids who don't live here. No shame I guess.


And yet, no doubt you will be happy for me to subsidize you and your family.

Is it right for the Australian government to be forced to do the same?

Consider for a moment, that I have lived only 2 and a bit years of my adult life in the US. Yet the US will tax my Australian superannuation distribution and that tax will subsidize the services you receive.

Which ultimately means the Australian taxpayer will subsidize you because I will have to rely on the Aged Pension sooner because the US has taxed my retirement distribution.


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## Nononymous (Jul 12, 2011)

Moulard said:


> Consider for a moment, that I have lived only 2 and a bit years of my adult life in the US. Yet the US will tax my Australian superannuation distribution and that tax will subsidize the services you receive.


I do hope that you wouldn't be so foolish as to pay such a tax.


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