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Old 15-09-2018, 08:11 PM   #659
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Join Date: Jun 2010
Posts: 7,447
Vegavega25, are you aware of the U.S. Additional Child Tax Credit and how it operates? I have to check the details again, but if your income is not too high then your U.S. citizen child should be eligible for US$1,000 per year in free money from the IRS — and possibly more going forward. This is one of the weird, quirky, happy aspects of global taxation associated with U.S. personhood.

I believe the way it works (for tax year 2017 and prior) is as follows. Let’s assume that you have not remarried, and your U.S. citizen child is living with you in Singapore at least most of the year. That should make you a “Head of Household” tax filer, which then means if you have an adjusted gross income (AGI) of US$75,000 or less, bingo, US$1,000 in free money. If that free money has gone unclaimed then it’s collectable up to 3 years after the original due date for the tax form. The due date is June 15 for those living overseas, so that’d mean the free money is still recoverable for tax years 2015, 2016, and 2017. (The 2015 tax return was due on June 15, 2016, and we’re less than 3 years away from that date as I write this.) Of course, if your child wasn’t alive at any time in 2015, that doesn’t count.

It’s also a somewhat difficult needle to thread, but wow, wouldn’t that be something if you could collect US$3,000 in free money — or even some portion of that. I was under the impression that the custodial parent/guardian also has to be a U.S. citizen or U.S. permanent resident, but no, that doesn’t seem to be a requirement.

If you’ve remarried it’s still potentially workable, but the income threshold is different.

Anyway, this’ll be something to examine more closely pending further information. Also, I should point out that the rules are changing for tax year 2018, and I’m not familiar with how the new Child Tax Credit rules work yet. They could be more favorable, though. The refundable portion is increasing to US$1,400, so that could be the new amount if you and your child are eligible. What I’m not sure about is whether they changed the eligibility rules in any impactful ways.

On edit: Before you get too excited, this isn’t going to work particularly well in Singapore in many scenarios. It’s very, very speculative and will depend on the nature of your income. Singapore is a comparatively low income tax country, and that’s not helpful for trying to grab this free money. However, even if it doesn’t work now, if in the future you move to a comparatively high income tax country with your child (while still a child under age 17), this’ll become interesting and relevant, probably.

Last edited by BBCWatcher; 15-09-2018 at 08:16 PM..
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