Child Tax Credit for Expats Filing in 2026: 2025 Rules

Living abroad does not, by itself, disqualify an American family from the Child Tax Credit. The important questions are the child's eligibility, the family's identification numbers, income and the forms filed with the return.

This page covers tax year 2025 returns filed in 2026. It does not apply the 2025 dollar amounts to tax year 2026. The IRS Child Tax Credit page sets out the 2025 amounts and qualifying-child tests.

2025 credit amounts and income limits

The refundable amount is not automatic. The ordinary earned-income calculation generally uses 15% of earned income above $2,500, subject to the per-child limit and other rules. Schedule 8812 also contains a different calculation for some families with three or more qualifying children. See the 2025 Schedule 8812.

Form 2555 blocks the refundable credit

If you file Form 2555, you cannot claim the ACTC. This is a separate eligibility restriction. It is not simply a question of whether you have enough earned income left after claiming the Foreign Earned Income Exclusion.

For example, a parent who excludes part of their foreign salary and still has taxable wages cannot assume the remaining wages produce an ACTC refund. Filing Form 2555 prevents that refundable credit. The same problem applies on a joint return when a spouse files Form 2555. The restriction also matters when claiming a foreign housing exclusion or deduction on that form. See the Form 2555 instructions.

A nonrefundable Child Tax Credit may still be available if there is remaining income tax to offset after applying the relevant limitations. Income above the FEIE limit, taxable investment income or other income can leave a tax liability. Calculate the credit on Schedule 8812 instead of estimating it from taxable income alone.

The income phaseout adds back FEIE amounts

The phaseout uses modified adjusted gross income (MAGI). Schedule 8812 adds back specified Form 2555 exclusion and deduction amounts to adjusted gross income. Excluding foreign wages therefore does not simply remove those wages from the Child Tax Credit phaseout calculation.

This matters for a family with high foreign earnings: the return may show relatively low adjusted gross income after the FEIE while the credit still phases out under the MAGI rules.

Child and parent identification requirements

For 2025, check all of the following before assuming the credit is available:

• The child is under 17 at year-end and meets the relationship, residency, support, dependent and joint-return tests.
• The child is a U.S. citizen, U.S. national or U.S. resident alien.
• The child has a Social Security number valid for employment issued by the return's due date, including extensions.
• The taxpayer has a Social Security number valid for employment issued by that due date. On a joint return, at least one spouse must meet that SSN requirement; the other needs an SSN or ITIN issued by the due date, including extensions.

Living together outside the United States can satisfy the child's residency test; it is not a requirement that the family live in the United States. Exceptions to the ordinary more-than-half-the-year rule can apply, including for a child born during the year. Check the Schedule 8812 instructions for the complete tests.

An ITIN for the child does not satisfy the Child Tax Credit's SSN requirement. Some dependents who do not qualify for this credit may qualify for the separate, nonrefundable Credit for Other Dependents. Its rules still need to be checked.

Compare FEIE and Foreign Tax Credit treatments for the whole return

A family paying eligible foreign income tax may benefit from comparing the FEIE with the Foreign Tax Credit. Choosing the credit instead of filing Form 2555 can preserve eligibility for the ACTC, but it does not guarantee a refund or the lowest total tax.

The comparison needs foreign-tax amounts, income categories, credit limitations, any carryovers and the family's existing FEIE election. Foreign tax attributable to excluded income cannot also produce a Foreign Tax Credit. Revoking an FEIE election can restrict re-election for the next five tax years without IRS approval, so a one-year refund comparison is not enough. See the IRS Foreign Tax Credit guidance and Form 2555 instructions.

Do not treat the FEIE as a freely adjustable deduction that you can reduce to any chosen amount to manufacture a credit. Apply the form's calculation, qualifying period and election rules. A spouse's separate income also does not remove the Form 2555 restriction on the ACTC for a joint return.

A U.S. client does not make consulting income U.S.-source

For services, where you perform the work generally determines the source of the income. A U.S. company paying you into a U.S. account for work performed abroad does not, by itself, turn those earnings into U.S.-source income. Work performed during U.S. visits needs separate attention. See the IRS explanation of foreign earned income.

What to gather before filing

Bring the children's dates of birth and SSN issuance details, both spouses' identification numbers, prior returns and Forms 2555/1116, current income records, foreign-tax records and the children's living arrangements. Those facts allow a comparison of credit eligibility and total tax using the same underlying information.

For preparation of an expat family return, review expat tax filing or describe your family's situation in the intake.