The Advance Child Tax Credit (ACTC) was a vital economic lifeline for countless American families in pandemic times—and while some of those temporary rules have expired, the child credits available now still play an important role, particularly if you're a US citizen abroad.
Whether you're attempting to figure out your eligibility, mapping out your 2025 return, or just attempting to decipher the acronyms—ACTC, CTC, ODC—this guide takes you through what's offered, how it operates, and how to claim it.
In 2021, the IRS began sending monthly advance payments of the Child Tax Credit under the American Rescue Plan. For the first time, families got up to $300 per child, per month before filing their tax return.
Rules have since gone back to a more normal arrangement—but a lot of families are still unsure about:
● If they still qualify for the Child Tax Credit
● What Advance Child Tax Credit is today
● Whether they can receive a refund if they pay no US tax
● How expats with children overseas can claim the benefit
The Child Tax Credit is tailored for parents or guardians of qualifying children under age 17. As of the 2025 tax year, the following applies:
● Up to $2,000 for each eligible child
● Of that, up to $1,700 can be refundable (known as the Additional Child Tax Credit or ACTC)
● The credit phases out for higher incomes (beginning at $200,000 for single filers, $400,000 for married filers)
In order to qualify, your child must:
● Be under age 17 on the last day of the year
● Be a citizen or resident alien of the US
● Have a valid Social Security Number
● Have been with you for over half a year (except for expats or the military)
Even if you don't owe any US tax, you might be able to receive a refund of up to $1,700 per child under the Additional Child Tax Credit. This applies particularly to:
● Lower-income households
● US citizens living abroad who make less than the Foreign Earned Income Exclusion limit
● Families with three or more children
You’ll need to file a tax return and complete Schedule 8812 to claim this refund.
This credit is for dependents who don’t qualify for the full Child Tax Credit like:
● Children age 17 or older
● Elderly parents or relatives you support
● Adult dependents with disabilities
The ODC offers up to $500 per eligible dependent, but it’s non-refundable—meaning it only reduces taxes you owe.
Yes—but keep a few things in mind:
● You need to file a US tax return to take the Child Tax Credit, even if you reside overseas.
● You can't take the refundable part (ACTC) if you've claimed all of your income with the Foreign Earned Income Exclusion (Form 2555).
● In order to claim ACTC as a foreign resident, it's usually preferable to claim the Foreign Tax Credit (Form 1116) rather than excluding income.
Example:
Jane resides in Germany along with her two US citizen children. She has a modest income and pays tax in Germany. If she excludes all of her income on Form 2555, she can't get the refundable ACTC. But if she takes the Foreign Tax Credit, she may be entitled to a refund—even if she owes no US tax.
1. Is the Advance Child Tax Credit still happening?
No. The advance monthly payments were only provided in 2021. As of 2025, you have to claim the Child Tax Credit on your yearly tax return.
2. How does CTC differ from ACTC?
CTC is the total credit, up to $2,000 per child. ACTC is the portion that can be refunded—up to $1,700 of that can be refunded to you if you owe no tax.
3. Are US expats eligible for the Child Tax Credit?
Yes, but only if your child is assigned a Social Security Number and you report on a tax return. Refundability (ACTC) might be reduced based on excluding foreign income.
1. I got Advance CTC payments in 2021. Must I repay them?
Not always. If your income went up or your circumstances changed, you might have to pay back some of it. But most families could keep the payments.
2. What if my child was born outside the US?
Provided your child is a US citizen or green card holder with a Social Security Number, they might be eligible. Citizenship must be established before the close of the tax year.
3. How do I receive these credits?
File a Form 1040 and complete Schedule 8812. If you're claiming Foreign Tax Credit, attach Form 1116. If you're overseas, using a preparer who's familiar with expat filings would be a good idea.
Mistakes to Avoid
Claiming the Foreign Earned Income Exclusion while attempting to claim ACTC
→ This disqualifies you from the refund component in most situations.
Assuming you don't qualify because you owe no tax
→ Expats leave money on the table only because they don't know that they can file and still receive a refund.
Missing the filing deadline
→ You don't get the credit, period, if you don't file.
The Advance Child Tax Credit may be done, but the standard Child Tax Credit and ACTC can still provide genuine financial assistance—particularly to US citizens living overseas. The trick is knowing the eligibility requirements, selecting the correct filing option, and ensuring that your dependents qualify under all the standards.
If you’re living overseas, navigating this alone can be tricky. But the benefit? Up to $1,700 per child, per year—even if your total US tax bill is zero.