Child Tax Credit for US Expats: 2026 Guide for Families Abroad

Many US citizens living abroad with children assume they cannot claim the Child Tax Credit (CTC) — or that it was phased out for expats. This is a costly misconception. The Child Tax Credit remains available to eligible US expat families in 2026, and for some families the Additional Child Tax Credit (ACTC) — the refundable portion — can result in a meaningful refund even when the family owes little or no US tax.

However, the interaction between the CTC, the Foreign Earned Income Exclusion (FEIE), and the Foreign Tax Credit (FTC) requires careful planning. Using the FEIE can eliminate or reduce the ACTC, while using the FTC instead may preserve it. Understanding which combination maximises your family’s tax position is essential.

Child Tax Credit: Basic Rules for 2026

For tax year 2026 (under current law, pending Congressional action), the Child Tax Credit is:

• $2,000 per qualifying child under age 17 at the end of the tax year
• Up to $1,700 refundable per child via the Additional Child Tax Credit (ACTC)
• Phase-out begins at $400,000 of modified AGI for married filing jointly ($200,000 for single filers) — the credit reduces by $50 for each $1,000 of income above the threshold

Note: The TCJA (Tax Cuts and Jobs Act) provisions are scheduled to expire after 2025, which could reduce the CTC back to $1,000 per child. Congress may act to extend or modify these provisions. As of the date of this guide, the 2026 tax year position remains subject to legislative developments.

Who Is a Qualifying Child for the CTC?

To qualify for the Child Tax Credit, a child must meet all of the following tests:

• Age: Under 17 at the end of the tax year
• Relationship: Son, daughter, stepchild, foster child, sibling, step-sibling, or a descendant of any of these
• Residency: Must have lived with you for more than half of the tax year (special rules apply for children of divorced or separated parents)
• Dependency: You must be able to claim the child as your dependent
• Support: The child must not have provided more than half of their own support for the year
• Social Security Number: The child must have a valid Social Security Number (SSN) — an ITIN is not sufficient for the CTC/ACTC. This is the most common issue for expat families.
• Citizenship: The child must be a US citizen, US national, or US resident alien

Social Security Numbers for Children Born Abroad

The SSN requirement is the most common barrier for US expat families. Children born outside the US to US citizen parents are eligible for US citizenship and an SSN, but many expat parents delay obtaining the SSN — sometimes for years. Without the SSN on the tax return, the CTC and ACTC are not available for that year, and the credit cannot be retroactively claimed once the SSN is obtained (except by filing an amended return for the year the child qualified, within the statutory deadline).

Application steps for a child’s SSN from abroad: Apply through the nearest US Embassy or consulate, completing Form SS-5 along with evidence of the child’s US citizenship (typically Form FS-240, Report of Birth Abroad, or a US passport). The SSN application can sometimes be combined with the citizenship documentation application.

The FEIE vs FTC Choice and the Child Tax Credit

This is where US expat CTC planning becomes critical. The interaction works as follows:

• The Additional Child Tax Credit (refundable portion) is calculated as 15% of earned income above $2,500
• Income excluded under the Foreign Earned Income Exclusion does not count as earned income for ACTC purposes
• If you exclude all or most of your income via FEIE, your “earned income” for ACTC purposes may be zero or very low, eliminating the refundable ACTC
• If instead you claim the Foreign Tax Credit on your UK tax paid (without using FEIE), your earned income remains fully in your AGI, and the ACTC is calculated on the full amount

Example: A US expat earning £80,000 ($100,000) in salary in the UK, with two qualifying children under 17, each with an SSN. If they use FEIE to exclude all earned income, their ACTC may be close to zero. If they instead use the Foreign Tax Credit on UK income tax paid (which at UK rates often fully offsets the US tax), they preserve the ACTC — potentially worth $3,400 (2 × $1,700) as a refund even with zero US tax liability after credits.

This choice is not automatic — it requires modelling both scenarios for your specific income level, UK tax paid, and number of qualifying children.

Other Child-Related Tax Benefits for Expats

Beyond the CTC, US expat families may be eligible for additional benefits:

• Child and Dependent Care Credit: Available if you pay for childcare to enable you (and your spouse) to work. UK nursery fees and childminder costs may qualify. The credit is non-refundable.
• Earned Income Tax Credit (EITC): Generally not available to US expats using the FEIE. If you do not use FEIE and have low income, you may qualify — but the EITC is complex for expats and requires careful analysis.
• Education credits (American Opportunity Credit, Lifetime Learning Credit): Generally require the educational institution to be in the US. UK universities and schools typically do not qualify, though there are exceptions for some accredited UK institutions.

Frequently Asked Questions

Can I claim the Child Tax Credit if my children are dual citizens living in the UK?

Yes, provided your children meet all the qualifying child tests — including the SSN requirement. Dual US-UK citizen children who live with you in the UK can qualify for the CTC and ACTC if they have valid SSNs and meet the other tests (age under 17, lived with you more than half the year, you can claim them as dependents).

My child has an ITIN but not an SSN. Can I still claim the CTC?

No. The Tax Cuts and Jobs Act requires a valid SSN for each qualifying child to claim the Child Tax Credit. An ITIN is not sufficient. You should apply for your child’s SSN as soon as possible — if your child is a US citizen, they are entitled to an SSN regardless of where they live.

We used the FEIE to exclude all our income last year. Can we switch to the Foreign Tax Credit this year to claim the ACTC?

Yes, but revocation of the FEIE election requires careful management. Once you revoke the FEIE election, you generally cannot re-elect it for five years. The decision to switch from FEIE to FTC to access the ACTC must be analysed over a multi-year horizon, not just the current year. If FEIE provides significant tax savings in future years, the value of the ACTC may not outweigh the cost of losing FEIE eligibility.

What if I had qualifying children in prior years but did not claim the CTC?

You can file an amended return (Form 1040-X) for open tax years (generally three years from the original return due date) to claim missed Child Tax Credits. This is particularly valuable if your children obtained SSNs recently — you may be able to amend prior returns within the open window to recover missed ACTC refunds.

Get Family-Specific US Expat Tax Advice

The FEIE-veRSUs-FTC decision has significant long-term consequences for US expat families, and the Child Tax Credit is just one factor among many. Our cross-border tax advisors work with US expat families in the UK to model tax outcomes, optimise child tax credits, ensure all required SSNs are in place, and prepare accurate, compliant US and UK returns.

Contact us today to discuss your family’s US expat tax position.