Dependents for CTC

[ChiHoang]

My client has a wife and 2 children who just emigrated to the US in July 2024. They got permanent residency status and social security numbers in July 2024. I will amend his tax returns for years 2021-2023 to change his status from single to MFJ. My question is: can I file 2 of his children as dependents for child tax credit (CTC) for years 2021-2023? He did support them financially when they were in Vietnam. 

I would not claim earn income tax credit (EITC) since they did not live with him in the US before July 2024. Is it correct?   

Thanks

[sjrcpa]

So why did you file him as Single if he was married?

[ChiHoang]

I filed him single because his wife did not have either ITIN or social security for years 2021-2023.

[sjrcpa]

FYI that was wrong. IRS allows NRA or Nonresident Alien in the spouse SSN field. I don't know if ProSeries does.

Good thing you are amending.

[ChiHoang]

Thanks for NRA information. I'll try it in the future.

How about the questions that I asked? 

[TaxGuyBill]

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@ChiHoang wrote:

My question is: can I file 2 of his children as dependents for child tax credit (CTC) for years 2021-2023?

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They needed their Identification Number by the due date of the tax return.

That means for 2021 and 2022, no.  For 2023, if they filed an extension, yes.  If they did not file an extension, no.

[sjrcpa]

I knew you would know the answer @TaxGuyBill 

I was tempted to page you.

[ChiHoang]

Thank you so much for your answers

[TaxGuyBill]

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@sjrcpa wrote:

I knew you would know the answer @TaxGuyBill 

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Actually, I am usually pretty sure, but I can never QUITE remember for sure.  But I know where it is the Code so I look it up.  😁

[BobKamman]

@TaxGuyBill   Even if the kids were nonresident aliens, living in Vietnam?  I'm looking at Pub 501, "You can't claim a person as a dependent unless that person is a U.S. citizen, a U.S. resident alien, a U.S. national, or a resident of Canada or Mexico."

I agree a joint return could have been filed, even without an SSN for the wife.  

[sjrcpa]

or MFS. Single was incorrect.

[TaxGuyBill]

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@BobKamman wrote:

Even if the kids were nonresident aliens, living in Vietnam?  I'm looking at Pub 501, "You can't claim a person as a dependent unless that person is a U.S. citizen, a U.S. resident alien, a U.S. national, or a resident of Canada or Mexico."

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I'm not sure what you are referring to.  I already said "no" to 2021 and 2022.   They seem to have become US Residents in 2023 ("permanent residency status" implies a Green Card).

[BobKamman]

@TaxGuyBill Post says "My client has a wife and 2 children who just emigrated to the US in July 2024."

[TaxGuyBill]

Okay, I misread that year.  So they would not qualify for the credit even if they filed an extension (assuming they were not US Residents or Citizens by some other means).

[ChiHoang]

Thank you so much for all your research and answers. 

I'll amend his tax returns for years 2021-2023 to change status from single to MFJ. I agree that they could not claim CTC and EITC since children were not US permanent residents in those years.

[ChiHoang]

Oh, one more question. I think they don't get CTC for their children, but they do get other dependent's credit (up to $500) for their children. Am I correct?

[TaxGuyBill]

No.  The Other Dependent Credit is just a sub-portion of the Child Tax Credit.  The same rule applies about needing their identification number before the due date of the return.

[sjrcpa]

Remember that MFJ means they elect to subject the wife's income to US tax.

[ChiHoang]

Thank you

[ChiHoang]

Got it. Thanks