Child Tax Credit Refunds for 2021 under president Biden’s stimulus package

In the tax year 2021, under the new provisions, president Biden’s $1.9 trillion stimulus package will temporarily rise the child tax credit from $2,000 to $3,000 per child ages 6 to 17 and $3,600 per child under 6. The credit will be fully refundable. It will also permit periodic payments to families from July to December.

It will make 17-year-old children eligible, though they still need to hold U.S. citizenship with their own SSN.

Half the credit amount will be paid in advance with the periodic payment, the other half will be claimed when you file next year’s tax return.

It will also allow zero income earners to claim since it removes the $2,500 earnings floor.

It will allow you to pay half of the credit in advance by having the IRS send periodic payments to families from July 2021 to{ December 2021. The second half can be claimed on your 2021 tax return.

Half the total credit amount will be paid in advance with the periodic payments, while the other half will be claimed on the tax return that you’ll file next year.

What to do to claim Child Tax Credit Refund?

If your filing is up to date and you already receive the Child Tax Credit Refund, continue filing as normal. File by June 15 at the latest so you’re in line for the period payments starting July 2021.

If you have never received the child tax credit refund before and your filing is up to date, file your 2020 tax return promptly so you’re registered to receive period payments starting July 2021. Make sure you claim your children, enter their SSN and Date of Birth.

Get a consultation with us to check if you apply to child tax credit refund and ensure you receive it.

What to do if you are behind?

There’s the IRS tax amnesty program to catch up on your US tax returns. Contact us to help back file your previous tax returns to pick up Child Tax Credit Refunds for 2018, 2019 and 2020 and also your stimulus payments if you qualify.

What is the allowed high income limit?

⇒ There is an income limit for the regular Child Tax Credit Refund (CTC) and a lower income limit for the higher amount ($3,000 / $3,600).

⇒ The income limit is based on Modified AGI (Adjusted Gross Income).

⇒ There is the possibility of earning more than the limits and be eligible.

How Noncompliant Expats Can Catch Up

The Expats That Have To File Back Taxes

Expats That Moved Abroad In The Past Two Years

Those who did not receive a warning letter from the IRS in this regard, but just woke up with the realization that they have to file US taxes from abroad, have fewer problems than all the others.  Their non-filing was an innocent error, and all they have to do is to backfile their missing tax returns – and all ends well.

Expats That Moved Abroad More Than Two Years Ago

Those who moved abroad more than two years ago but who discovered their obligation to file from abroad without receiving a letter from the IRS to ask for an explanation of why they had not been filing.  It does not matter if these ex-pats missed twenty years of filing, the Streamlined Procedure program was designed for them and is the very best way for them to catch up.

Expats Who Received A Letter From The IRS

Those who found a dreaded envelope with a letter from the IRS in their mailbox thousands of miles away from the hustle and bustle of the US, requesting an explanation for why they had failed to file their tax returns, should respond with calm.

Immediately consult an ex-pat-specialist CPA – or attorney – to assist you in your response by providing a plan based on the very best path forward. 

Expats Who Ignored The Requirement To File Willingly

Those who were aware of their obligation to file tax returns from abroad, but neglected to file nevertheless.  Typically these ex-pats ignored letters from the IRS or willfully avoided their responsibilities by concealing their income or participating in a scheme to hide their offshore accounts and assets from the authorities.

How To Qualify For The Streamlined Procedure

To Qualify For The Streamlined Process

⇒ You must be a US citizen or Green Card Holder.

⇒ You are a resident abroad: The IRS requires that you must have been outside of the US for at least 330 days in at least one of the three years that you are filing the Streamlined Procedure.

⇒ You did not willfully avoid filing:

⇒ Conduct is non-willful if it is the result of negligence, inadvertence, a mistake, or the result of a bona fide misunderstanding of the requirements of the law.

⇒ Willful conduct is the voluntary, intentional violation of a known legal obligation.

⇒ When the IRS investigates willful conduct, they will consider whether the taxpayer had a financial planner or accountant familiar with US law. If so, the probability is that they knew all about their obligations.

⇒ Was the taxpayer honest in their communications with their financial planner or accountant relation to their assets and income?

⇒ Was the taxpayer compliant in their country of residence?

⇒ What type of investments do they have? Complex structures imply specialist advice.

⇒ Did they previously file US returns from abroad? If so, they knew they had to.

⇒ Someone who should have known that they were supposed to file, but remained intentionally ignorant by not asking obvious questions, will be considered by the IRS to show reckless disregard and willful blindness. Someone who has a financial planner will very often not meet the Streamlined Procedure criteria for non-willfulness.