# ACTC for tax year 2018



## Alltimegreat1 (Feb 25, 2015)

I read that the child tax credit was increased to $2,000 per child due to President Trump's tax bill. I also read that only $1,400 thereof is actually refundable.

In light of this (assuming a person has zero tax liability), would it not be a good idea to try to incur $600 of taxes per year?

I could imagine withdrawing money from mutual funds such that I would owe $600 in taxes, and then subsequently reinvesting that money.

Any thoughts?


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## Bevdeforges (Nov 16, 2007)

Take a look at this article from The Motley Fool before you start playing around with your US returns.
https://www.fool.com/taxes/2018/01/09/the-2018-child-tax-credit-changes-what-you-need-to.aspx

And pay special attention to this:


> However, the refundable portion of the credit is capped at 15% of your *earned income in excess of $4,500*. This effectively means that if your earned income is greater than $13,833, your refundable credit amount is only capped by the $1,400 limit, and if it is less, the refundable portion of the credit can be reduced.


If you don't have earned income (i.e. salary and wages) in excess of that $4500 mark to declare (and pay tax on), it's not going to do you much good. If, for example, you're taking the FEIE to exclude your earned income, then I believe you probably won't get any refund since you're deemed to have no "earned income."

There is also a caution about the loss of the personal exemption, too.


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## Alltimegreat1 (Feb 25, 2015)

Thanks for that explanation. I work in Germany making about €70k with no US-based earned income. The past few years I've been claiming the ATCT and getting a large chunk of the $1,000 paid out. What ACTC refund can I expect from now on given that I have zero US-based earned income?


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## Bevdeforges (Nov 16, 2007)

It has nothing to do with US-based earned income. Your foreign-based earned income counts, but only if you don't exclude it with the FEIE - you would have to use the Foreign Tax Credit on your foreign earned income.


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## Alltimegreat1 (Feb 25, 2015)

Great, thanks. I've been using the FTC and not the FEIE.


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