Some child dependents don’t qualify filers for credits, by Jean Mammen, EA

Some child dependents don’t qualify filers for credits on Form 1040 or 1040NR. Some children who are not US citizens or residents may qualify as dependents on Form 1040, and even on Form 1040NR for residents of certain countries, without the taxpayer being able to claim certain credits for them.

Dependent exemptions may be claimed for children who meet the dependent taxpayer test either as qualifying child or qualifying relative. The children also either meet or qualify for an exception for other tests: Citizen or resident, joint return, relationship, age, not the qualifying child of someone with a better claim.

The most common barriers to claiming the child tax credit or the earned income credit for dependent children are that the child did not live in the U.S., or was not a U.S. citizen or resident.

Taxpayer Identification Number (TIN) may be another barrier. A child who does not qualify for a social security number may not have adequate documentation to obtain an ITIN.

The criteria for claiming the child tax credit and for claiming the earned income tax credit (EIC) are more restrictive than for claiming a personal exemption for a dependent child. The child and dependent care credit may be difficult for some taxpayers to qualify for.

Even taxpayers who are filing on form 1040NR and are residents of Canada or Mexico, may claim a child as a dependent for the personal exemption if the child is a resident of Canada, Mexico or the US and meets all the other criteria to be claimed as a dependent

A South Korea resident may be able to claim a pro-rated dependent exemption for a child who lives with the filer at some time during the year.

An India resident who is a student or business apprentice may also be able to claim child dependents if the children did not enter the US on dependent visas. They likely would have been born in the US.

Additional Criteria to claim a Child Dependent Exemption

The child generally lives with the taxpayer for at least half the year.

Exceptions apply:

If the parents are divorced, separated, never married, or live apart and they agree on which parent shall claim the dependent exemption, and they fulfill the conditions, the non-custodial parent may claim the child as a dependent.

Your child in Canada or Mexico may meet the ‘qualifying relative’ standard. If the person the child lives with is not a U.S. citizen and has no U.S. gross income, that person is not a U.S. taxpayer and so the child is not the qualifying child of another U.S. taxpayer.

Child Tax Credit – Child-related Criteria for Claiming Child Tax Credit for a Dependent Child

The child must be a U.S. citizen, national, or resident alien, including by meeting the Substantial Presence Test (SPT).

Thus the dependent child cannot be living in Canada or Mexico.

If the child is in the U.S. on a visa, not a citizen or green card holder, the child must be able to count days and the child must have 183 days of presence in the U.S. to meet the SPT test.

The child must be under age 17 on December 31.

Resident of the U.S. may mean tax resident by meeting the substantial presence test (SPT), rather than by being a resident alien (green card holder).  The substantial presence test is met when a child has 183 countable days of presence in the US in the most recent three-year period, and at least 31 of those days are in the tax year. Most foreigners in the U.S. may count days of presence. But,

A and G visa holder dependents may not count days of presence.

Dependents of students on F and J visas may not count days during their first five calendar years in the U.S.

Dependents of J visa exchange visitors may not count days during their first two calendar years in the U.S. within the most recent six year period.

EIC – Child-related and other Criteria for Claiming EIC

The child must have lived with you in the U.S. for more than half the year.

If married, the taxpayer must file Married Filing Jointly, or Head of Household status, not Married Filing Separately.

The taxpayer (and spouse, if married) must not be a non-resident alien during any part of the tax year.

Child and Dependent Care Credit Criteria

The child must live with the taxpayer(s) more than half the year.  Only expenses incurred while the child is below age 13 qualify.

This credit is unlikely to be workable if the taxpayer is married and filing on form 1040NR.  Head of Household is not a status available on form 1040NR. Canadians and Mexicans, South Koreans and Indian students may file ‘married’ on form 1040NR, but only one spouse may have taxable U.S. income on that form, and the credit requires that both spouses have earned income unless one is a full-time student or disabled.  Single taxpayers or Qualifying Widowers might qualify for the child and dependent care credit on form 1040NR.

For form 1040 filers, the child and dependent care credit cannot be claimed if one spouse, likely on an A or G visa,  is exempt from paying U.S. income tax on earned income.

Claiming a Dependent Exemption or Credits During Adoption of Children who are not US Citizens or Residents

An adopted child of a U.S. citizen or national who is a non-resident alien will meet an exception to the ‘citizen or resident’ test if the child is a member of the household for a full year, or, was lawfully placed in it for adoption.

Review of Dependency Rules.

Child as dependent: The simplest situation to claim a child as a dependent (qualifying child/qualifying relative) on form 1040 is when your child is:

Under 19 years old, and younger than the taxpayer

Under 24, a full time student, and younger than the taxpayer

Permanently and totally disabled, and of any age

Is a U.S. citizen or a resident of the U.S., Canada, or Mexico

Does not file a joint return with a spouse, except to obtain a refund of withholding

Does not provide more than half of the child’s own support

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