U.S. TAX GUIDE IN FRANCE
What is the Additional Child Tax Credit (ACTC)?
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. For the 2024 tax year, the ACTC amount is $1,700 per child. This credit can be claimed even if all your income is earned abroad.
What are the income requirements for the ACTC?
To claim the ACTC for 2024, you need a Modified Adjusted Gross Income (MAGI) of at least $2,500. The credit amount is calculated as 15% of your earnings above this threshold, up to the maximum refundable amount per child.
Example with One Qualifying Child:
- MAGI: $15,000
- Earnings above $2,500 threshold: $12,500
- 15% of $12,500: $1,875
- ACTC limit: $1,700 per child
- You can claim the full $1,700.
Example with Two Qualifying Children:
- MAGI: $15,000
- Earnings above $2,500 threshold: $12,500
- 15% of $12,500: $1,875
- ACTC limit: $1,700 per child ($3,400 for two children)
- You can claim $1,875, not the full $3,400.
Can you claim the ACTC with only foreign income?
Yes, American expatriates in France with only foreign income can still claim the ACTC. The credit is refundable, meaning you can receive a payment from the IRS even without a US tax liability.
How does the ACTC work for those employed or self-employed in France?
If you work in France, either as an employee or self-employed, your income counts towards qualifying for the ACTC. The important factor is meeting eligibility criteria like income level, child’s age, and having a valid Social Security number for your child.
Is the ACTC additional cash in your pocket?
Yes, the ACTC is refundable, resulting in actual money deposited into your bank account. It’s not just a tax liability reduction but a direct financial benefit.
What do you need to do to claim the ACTC?
To claim the ACTC, you must file a US tax return, ensuring all necessary forms and documentation are complete. There are no additional costs beyond standard tax preparation fees. This makes the ACTC a valuable opportunity for American expatriates with children to receive financial support from the US government each year.
