The Child Tax Credit is worth up to $2,200 for each qualifying child in 2026, and up to $1,700 of that is refundable. Americans abroad reach the same two figures as Americans at home, with one exception that costs real money: electing the foreign earned income exclusion on Form 2555 removes the refundable half for that whole year.
| What is at stake | Foreign earned income exclusion (Form 2555) | Foreign tax credit (Form 1116) |
|---|---|---|
| Non-refundable Child Tax Credit | Up to $2,200 a child, against US tax still standing | Up to $2,200 a child, against US tax still standing |
| Refundable additional child tax credit | Barred for the year, whatever the income | Up to $1,700 a child |
| Foreign wages counted in the refundable formula | Excluded wages are not counted | Counted in full |
| Income tested for the $200,000 and $400,000 taper | Excluded wages are added back anyway | Already in adjusted gross income |
| The section 911 election | Stays in force | Claiming the refundable credit revokes it |
| Returning to the exclusion later | No restriction | Blocked until the sixth taxable year without IRS consent |
How much is the Child Tax Credit in 2026?
Up to $2,200 for each qualifying child, with up to $1,700 of it refundable. Revenue Procedure 2025-32 fixes both figures for taxable years beginning in 2026, and neither one moved from 2025. The credit taper starts above $200,000 of modified adjusted gross income, or $400,000 on a joint return.
Section 70104 of the One Big Beautiful Bill Act lifted the credit from $2,000 to $2,200, made the expanded credit permanent rather than letting it lapse at the end of 2025, and set it to rise with inflation from 2026 onward. The reason 2026 reads the same as 2025 is the rounding rule the same section wrote into section 24(i)(3): an inflation increase that is not a multiple of $100 is rounded down to the next lowest multiple of $100, and this year the raw adjustment did not clear $100.
A dependent who is 17 or older at year end, or who otherwise falls outside the main credit, carries the separate $500 credit for other dependents, which is neither indexed nor refundable.
Does the foreign earned income exclusion cancel the refundable credit?
It does. Schedule 8812 carries the rule as a caution at the head of Part II-A: if you file Form 2555, you cannot claim the additional child tax credit. Publication 54 puts the same answer to the question directly — claim the foreign earned income exclusion, the foreign housing exclusion or the foreign housing deduction and the additional child tax credit is not available for that year.
The mechanism is arithmetic rather than policy. The refundable amount is 15 percent of earned income above $2,500, capped at $1,700 a child, and earned income here means income includible in gross income. Excluded wages are not includible, so a parent who excludes every dollar of foreign salary has nothing left in the formula.
The $2,200 half survives the election on paper. In practice it has little left to work on, because the credit is non-refundable and the exclusion is usually what removed the US tax it would have offset. Both halves can land on zero in the same year, which is why the choice between the exclusion and the foreign tax credit carries the outcome.
Why the exclusion does not lower the income that is tested
Excluded income is added straight back for the taper test. Schedule 8812 line 2b takes the amounts from lines 45 and 50 of Form 2555 — the foreign earned income exclusion and the housing exclusion — and line 3 adds them to adjusted gross income. The $200,000 and $400,000 thresholds are measured on that combined figure, not on the reduced one that reaches the front of the return.
Above the threshold the credit falls by 5 percent of the excess, with the excess rounded up to the next multiple of $1,000 first — $50 of credit for every $1,000 over the line. A family on $430,000 of worldwide earnings loses $1,500 of credit whether or not Form 2555 is attached.
What switching to the foreign tax credit costs
Claiming the refundable credit after a year in which the exclusion was elected revokes the election. Publication 54 is explicit: taking the foreign tax credit or deduction, the additional child tax credit or the earned income credit in a later year means the earlier choice is treated as revoked for that year. No separate statement is needed.
The lock-out is the part that is easy to miss. Under 26 CFR 1.911-7(b)(1) a revocation runs for that year and every year after it, and the individual may not, without the consent of the Commissioner, again make the same election until the sixth taxable year following the year the revocation first took effect. Consent means a private letter ruling request to the Associate Chief Counsel (International).
The regulation names the facts weighed on such a request: a period of residence in the United States, a move between foreign countries with different tax rates, a substantial change in the tax law of the country of residence, and a change of employer. A one-year switch made to collect a refund is not on that list.
How much earned income the refundable credit needs
About $13,834 of counted earned income produces the full $1,700 for one child, and about $25,167 does it for two. The formula is 15 percent of earned income above $2,500, so each child adds roughly $11,333 to the income needed to reach that child’s $1,700 ceiling.
Below those levels the refundable amount is whatever the 15 percent produces, which is why it is worth most to parents on modest foreign salaries — exactly the households the exclusion looks most attractive to. A parent earning $40,000 abroad with two children is choosing between excluding that income and collecting $3,400.
One timing point sits alongside the figures: refunds on returns claiming the additional child tax credit are not issued before mid-February, and the hold covers the whole refund rather than the credit portion alone. It stacks on to a filing calendar that already runs late for Americans abroad.
Which Social Security number rules changed
From the 2025 tax year the filer needs a Social Security number, not only the child. Section 70104 rewrote section 24(h)(7) so that no credit is allowed for a qualifying child unless the return carries the taxpayer’s Social Security number — on a joint return, at least one spouse’s — together with the number of the child.
The statute defines the number narrowly: issued by the Social Security Administration to a US citizen or otherwise on the basis that carries work authorization, and issued before the due date of that return. An individual taxpayer identification number does not satisfy it, and a number that arrives late does not cure the year.
The same section made the consequence faster. Omitting a correct Social Security number is now a mathematical or clerical error under section 6213(g)(2)(I) across the whole of section 24, so the credit can be struck by summary assessment rather than by a deficiency notice.
What a child without a Social Security number gets
The $500 credit for other dependents, and only where the child is a US citizen, US national or US resident alien. That credit accepts an individual taxpayer identification number or an adoption taxpayer identification number issued by the due date. A dependent who is none of those three gets neither credit.
Schedule 8812 illustrates the hard edge with its own example: a sibling’s ten-year-old child living in Mexico who qualifies as a dependent, is not a US citizen, national or resident alien, and so cannot be used for the $500 credit either. US status for the child, documented and numbered in time, is what the credit turns on.
The residency test itself is kinder than people expect. The child has to have lived with you for more than half the tax year, been under 17 at year end, not provided more than half of their own support, been claimed as a dependent and been a US person. Nothing requires time in the United States.
The three-or-more-children route rarely helps abroad
Part II-B of Schedule 8812 offers a second formula to filers with three or more qualifying children, and it is built on withheld social security, Medicare and Additional Medicare taxes. A parent abroad whose contributions go to the local system under a totalization agreement has none of those taxes withheld, so the alternative calculation returns nothing.
That leaves the ordinary 15 percent formula as the only route for most families abroad, and it is the formula Form 2555 closes. The question for a US parent with children under 17 is therefore not how large the Child Tax Credit is. It is which of two filing positions is worth more over five years, because that is how long the choice runs.
Sources
- Internal Revenue Service — Revenue Procedure 2025-32, 2026 inflation adjusted items — https://www.irs.gov/pub/irs-drop/rp-25-32.pdf — checked 3 October 2026
- US Government Publishing Office — Public Law 119-21, section 70104, Extension and Enhancement of Increased Child Tax Credit — https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm — checked 3 October 2026
- Internal Revenue Service — Schedule 8812 (Form 1040), Credits for Qualifying Children and Other Dependents — https://www.irs.gov/pub/irs-pdf/f1040s8.pdf — checked 3 October 2026
- Internal Revenue Service — Instructions for Schedule 8812 (Form 1040) — https://www.irs.gov/pub/irs-pdf/i1040s8.pdf — checked 3 October 2026
- Internal Revenue Service — Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad — https://www.irs.gov/pub/irs-pdf/p54.pdf — checked 3 October 2026
- Internal Revenue Service — Child Tax Credit — https://www.irs.gov/credits-deductions/individuals/child-tax-credit — checked 3 October 2026
- Internal Revenue Service — Revoking your choice to exclude foreign earned income — https://www.irs.gov/individuals/international-taxpayers/revoking-your-choice-to-exclude-foreign-earned-income — checked 3 October 2026
- Electronic Code of Federal Regulations — 26 CFR 1.911-7, Procedural rules — https://www.ecfr.gov/current/title-26/section-1.911-7 — checked 3 October 2026
- Internal Revenue Service — Instructions for Form 2555, Foreign Earned Income — https://www.irs.gov/pub/irs-pdf/i2555.pdf — checked 3 October 2026
- Internal Revenue Service — Foreign tax credit — https://www.irs.gov/individuals/international-taxpayers/foreign-tax-credit — checked 3 October 2026
- Internal Revenue Service — Foreign earned income exclusion — https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion — checked 3 October 2026
Common questions
- Can I claim the refundable child tax credit if I use the foreign earned income exclusion?
- No. Schedule 8812 states that a filer who files Form 2555 cannot claim the additional child tax credit, and Publication 54 gives the same answer for the foreign housing exclusion and the housing deduction. The bar applies for the whole year, whatever the income. The non-refundable $2,200 per child survives, but only against US tax that is still standing.
- How much is the child tax credit for Americans abroad in 2026?
- Up to $2,200 for each qualifying child, with up to $1,700 of that refundable. Revenue Procedure 2025-32 fixes both figures for taxable years beginning in 2026 and neither moved from 2025. There is no separate figure for Americans abroad. The difference abroad is which filing position keeps the refundable $1,700 reachable.
- Will an ITIN work for my child instead of a Social Security number?
- Not for the child tax credit. Section 24(h)(7), as rewritten by the One Big Beautiful Bill Act, requires the child’s Social Security number on the return, issued to a US citizen or otherwise on a basis carrying work authorization. An individual taxpayer identification number is accepted only for the separate $500 credit for other dependents.
- Do I need a Social Security number myself, or only my child?
- Both, from the 2025 tax year onward. No credit is allowed for a qualifying child unless the return carries the filer’s own Social Security number as well as the child’s. On a joint return at least one spouse needs a valid number; the other needs either a Social Security number or an individual taxpayer identification number.
- My child was born abroad and the Social Security number has not arrived. What happens to that year?
- The credit is not allowed for that child. The statute requires the number to have been issued before the due date of that return, and a number that arrives afterwards does not cure the year. The same legislation made a missing or wrong number a mathematical or clerical error, so the credit can be struck by summary assessment.
- Does the exclusion lower my income for the $200,000 and $400,000 thresholds?
- It does not. Schedule 8812 line 2b takes the amounts from lines 45 and 50 of Form 2555 and line 3 adds them back to adjusted gross income, so the taper is measured on the combined figure. Above the threshold the credit falls by $50 for every $1,000 of income over the line.
- What happens to my section 911 election if I switch to the foreign tax credit?
- Claiming the foreign tax credit, the additional child tax credit or the earned income credit in a later year is itself treated as revoking the earlier exclusion election, with no separate statement needed. Under 26 CFR 1.911-7(b)(1) the revocation runs for that year and every year after, and re-electing before the sixth taxable year needs the Commissioner’s consent.
- How is consent to re-elect the exclusion obtained?
- By a private letter ruling request to the Associate Chief Counsel (International). The regulation lists the facts weighed: a period of residence in the United States, a move between foreign countries with different tax rates, a substantial change in the tax law of the country of residence, and a change of employer. A one-year switch to collect a refund is not among them.
- How much do I have to earn abroad to reach the full $1,700 for one child?
- About $13,834 of counted earned income, because the refundable amount is 15 percent of earned income above $2,500 and stops at $1,700 a child. Two children need roughly $25,167. Counted earned income means income includible in gross income, which is why excluded wages produce nothing in the formula.
- My children live with me in Portugal. Does that break the residency test?
- No. The test is that the child lived with you for more than half the tax year, not that either of you spent time in the United States. The other conditions are age under 17 at year end, not providing more than half of their own support, being claimed as a dependent, and being a US citizen, US national or US resident alien.
- I have three children abroad. Does the alternative calculation help?
- Rarely. Part II-B of Schedule 8812 offers filers with three or more qualifying children a second formula built on withheld social security, Medicare and Additional Medicare taxes. A parent whose contributions go to the local system under a totalization agreement has none of those taxes withheld, so that route returns nothing and the ordinary 15 percent formula is the only one left.
A note on tax content
Tax content on this site is for general informational purposes only and does not constitute tax advice. Rules for U.S. citizens abroad depend on individual circumstances, country of residence, income sources, account structures, and applicable treaties — always consult a qualified tax professional in the relevant jurisdiction before making decisions.
The information provided by US Expat is for educational and informational purposes only. It should not be treated as personalized tax, legal, immigration, investment, insurance, or financial advice. U.S. citizens abroad should consult qualified professionals who understand their specific facts and circumstances. US Expat is not a law firm, tax filing firm, or immigration law firm.
Rules and thresholds for U.S. citizens abroad change. Pages are reviewed periodically; confirm current details with a qualified professional before acting.
