Posted By: Clark Stott
Let’s admit it, having children is expensive. A number of expenses, such as education and child care, need to be added to the budget, not to mention the increase in clothing, food and leisure costs.
The Internal Revenue Service (IRS) actually recognizes this struggle and allows various exemptions, deductions, and credits to taxpayers who have children. The most common benefit is an exemption of $4,000 (for 2015) (indexed for inflation) for each of your child that qualifies as a dependent per the IRS rules. Other benefits include deductions for medical expenses and student loan interests and credits for child care and education expenses.
There is also a credit that can reduce your tax bill by as much as $1,000 per child – the Child Tax Credit.
The Child Tax Credit can be complicated enough for taxpayers in the US but there is even further complications for us expats, choosing to live and work abroad.
We've put together a 10 point checklist, written for expats, to help understand the Child Tax Credit, how it works and when you can and can't claim it.