U.S. EXPAT TAX GUIDE – FRANCE
How does the additional child tax credit benefit American expats in France?
The Additional Child Tax Credit (ACTC) is a refundable credit for American parents living abroad, including those in France. It applies to parents with US citizen or green card holder children under 17 who have a Social Security number.
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This credit is available even if your income is earned outside the US. For the 2023 tax year, the credit amount is $1,600 per child, increasing to $1,700 per child in 2024.
What are the income requirements for the additional child tax credit?
To qualify for the refundable Child Tax Credit of $1,700 per child in 2024, you need a minimum Modified Adjusted Gross Income (MAGI) of $2,500. From there, 15% of your earnings above $2,500 are used to calculate your potential refund amount, up to the maximum credit per child.
Example for One Child:
With a MAGI of $15,000 in 2024, subtracting $2,500 leaves $12,500 eligible. Taking 15% of this amount equals $1,875. Since the maximum refundable credit is $1,700 per child, you could claim the full $1,700.
How does having two children affect the ACTC?
For two children, the combined refundable credit is calculated similarly, using 15% of your MAGI above the $2,500 threshold for each child. Each child qualifies for up to $1,700. If the calculated amount is less than $3,400 for two children, you can only claim the calculated amount.
Example for Two Children:
If your MAGI calculation yields $1,875, that amount can be claimed for two children, not the full $3,400.
Can expats receive the ACTC with only foreign income and no US tax liability?
Yes, American expatriates in France with only local income can still benefit from the ACTC. The credit is refundable, meaning you can receive a payment from the IRS even without a US tax liability. This often surprises expats, as it allows receiving money from the US government without paying US taxes directly.
How does the ACTC apply to those working in France?
Whether you are employed or self-employed in France, your earnings count toward qualifying for the ACTC. The important factors are meeting the eligibility criteria, such as income level, child’s age, and having a valid Social Security number for your child, regardless of where the income is earned.
Is the ACTC extra money for American expats?
Yes, the ACTC provides actual cash, not just a tax liability reduction. This refundable credit means money can be deposited into your bank account, offering real financial benefits beyond merely offsetting taxes.
How do you claim the additional child tax credit?
To claim the ACTC, you must file a US tax return, including all required forms and documentation. Besides standard tax preparation fees, there are no extra costs to claim this credit.
This makes it a valuable opportunity for American expatriates with children to receive financial benefits from the IRS each year. It’s a significant yet often overlooked option for receiving support from the US government while living abroad.
Why partner with a specialist Expat accountant?
Living outside of the US can make your tax filing requirements complicated. To ensure you pay the minimum amount of taxes, it’s critical to work with an accountant who understands every aspect and avenue for reducing your tax liability. We have a dedicated team of tax accountants who work exclusively with US expats earning and investing in Germany. Partnering with a specialist expat accountant can help you navigate complex tax regulations and optimize your tax situation.
