U.S. Tax Preparation Worldwide   James Maertin CPA

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Tax Guide 

IRS Tax Law Changes

Americans Abroad

Capital Gains, Interest and Dividends



Education Credits, Scholarships

Foreign Bank Reporting

Foreign Nationals

Social Security, Medicare, Self Employment Tax

State Taxes

Tax Deadlines, Extensions, Late Payments, Estimated Tax

Tax Resident, Nonresident, Dual Status

Other Topics

Dependents, Child Tax Credit, Dependent Care Credit, Child Tax Return, Nanny Tax


As of tax year 2018, personal exemptions, which include those for dependents, are no longer available at the federal level.

All dependents must have a social security number (SSN).  If your dependent is a nonresident alien who is not eligible to get a social security number, you must list the dependent's individual taxpayer identification number (ITIN) instead of an SSN on the tax return. To apply for an ITIN, Form W-7 is filed with your tax return.


Children usually are citizens or residents of the same country as their parents. If you were a U.S. citizen when your child was born, your child generally is a U.S. citizen. This is true even if the child's other parent is a nonresident alien, the child was born in a foreign country, and the child lives abroad with the other parent.

Important Note: A spouse is never claimed as a dependent on Form 1040.

In general, an individual may not be claimed as a dependent unless:

(Note: Foreign students on an F, J, M or Q visa are not considered tax residents for their first 5 years on the visa, and so cannot be claimed as dependents).

Nonresidents (Form 1040NR):   You cannot claim dependents (with certain exceptions for residents of Canada, Mexico, South Korea and India).  

Child Tax Credit

Americans Abroad: 

To qualify for the child tax credit, you must show taxable earned income on your US tax return. If you exclude all of your income using the foreign earned income exclusion, you will not be eligible to claim the child tax credit. If you exclude some but not all of your income, you can claim the child tax credit, but you cannot receive the refundable portion of the credit. 

If you have children that qualify for the child tax credit, in some cases you may be better off using the foreign tax credit rather than the foreign earned income exclusion.  However, if you have previously claimed the foreign earned income exclusion, you would have to revoke the exclusion, which may not be beneficial.  I will let you know if I think revoking the exclusion would benefit you.

$500 non-refundable credit for non-child dependents. 

Dependent Care Credit

If you paid someone to care for your child or a dependent so you could work, look for work or go to school, you may be able to claim a Child and Dependent Care Credit of up to $3,000 for one child under age 13 or $6,000 for two or more children under age 13.  To be eligible for the refundable portion of the credit for 2023, you (or your spouse in the case of a joint return) must have your main home in one of the 50 states or the District of Columbia for more than half of the tax year.

Dependent care/childcare expense while you worked, looked for work, or studied: 

(1) Only include expenses that were (a) paid in 2023 for 2023 dependent care and/or (b) prepaid in 2022 for 2023 dependent care

(2) If married, both spouses must have earned income (from work); or one spouse worked and the other was a full time student for 5 months or more

(3) A child must be under age 13 when care was provided (or a dependent physically/mentally unable to care for him/herself)

(4) School tuition only qualifies up to the pre-school level.  Include nursery, preschool, day camp, after school childcare, and vacation care.

Dependent/Child Tax Return

If a child whose gross income has both earned and unearned income, he or she must file a return for 2023 if:

Example 1.  Joe is 20, single, not blind, and a full-time college student. He doesn’t provide more than half of his own support, and his parents claim him as a dependent on their income tax return. He received $200 taxable interest income and earned $2,750 from a part-time job (earned income $2,750 plus $400 = $3,150).  He doesn't have to file a tax return because his gross income of $2,950 ($200 interest plus $2,750 in wages) isn't more than $3,150.
Example 2. 
The facts are the same as in Example 1, except that Joe had $600 taxable interest income.  He must file a tax return because his gross income of $3,350 ($600 interest plus $2,750 wages) is more than $3,150 (earned income of $2,750 plus $400).

Earned Income
:  Dependent children pay income tax on their earned income at their own individual tax rates (single).


     Election to Report Child Income on Parent Tax Return

Your child will not have to file a tax return if you elect to report your child’s income on your return. You can make this election if your child meets all of the following conditions.
• The child was under age 19 (or under age 24 if a full-time student) at the end of 2023. 
• The child’s only income was from interest and dividends, including capital gain distributions and Alaska Permanent Fund dividends.
• The child’s gross income for 2023 was less than $12,500.
• The child is required to file a 2023 return unless you make this election.
• The child does not file a joint return for 2023.
• There were no estimated tax payments for the child for 2023 (including any overpayment of tax from his or her 2022 return applied to 2023 estimated tax).
• There was no federal income tax withheld from the child’s income.
• You must also qualify (see https://www.irs.gov/pub/irs-pdf/f8814.pdf).

Rate may be higher.  If your child received qualified dividends or capital gain distributions, you may pay up to $110 more tax if you make this election instead of filing a separate tax return for the child. This is because the tax rate on the child's income between $1,100 and $2,200 is 10% if you make this election. However, if you file a separate return for the child, the tax rate may be as low as 0% because of the preferential tax rates for qualified dividends and capital gain distributions.

Child Income Tax Rate (Kiddie Tax):  In 2023, the first $1,250 of a child's unearned income qualifies for the standard deduction. Any unearned income beyond $2,500 is taxed at the parent's normal tax bracket.


Adoption Credit

If you adopt a child, you may be eligible for an Adoption Credit.

Tuition Credits for Dependents

See Education Credits

Nanny Tax

See Nanny Tax