Yes — Americans living in the UK can claim the US Child Tax Credit, and for many families it produces an actual refund cheque from the IRS even though they live abroad and owe no US tax. For the 2025 tax year the credit is worth up to $2,200 per qualifying child, of which up to $1,700 per child is refundable. But there is one mistake that quietly wipes out the refundable part for thousands of expat families every year. Here is how the credit works, who qualifies, and how to keep the refund — including how the refundable amount is actually calculated, the all-important Social Security Number requirement, the smaller Credit for Other Dependents, and how to recover the money for past years you may have missed. It is one of the few parts of the US tax system that can pay a UK-based family rather than cost them, so it is worth understanding properly.
What the Child Tax Credit is worth in 2025
The refundable part is the magic for expats. Because most Americans in the UK already reduce their US tax to zero with the Foreign Tax Credit, the question is not "does this lower my bill" — it is "can I get cash back". The refundable Additional Child Tax Credit means yes, often $1,700 per child, straight to your account.
- Up to $2,200 per qualifying child for the 2025 tax year (raised under recent law).
- Up to $1,700 per child of that is refundable — payable to you even if your US tax bill is zero.
- You need at least $2,500 of earned income to start unlocking the refundable portion.
- The credit begins to phase out at higher incomes (well above most expat families' levels).
Which children qualify
The child must meet all of the IRS tests for the year. In outline:
- Age: under 17 at the end of the tax year.
- Relationship: your child, stepchild, foster child, sibling, or a descendant of any of them.
- Support and residence: the child lived with you for more than half the year and did not provide more than half their own support.
- Dependency: you claim the child as a dependent on your return.
- Citizenship: the child is a US citizen, US national, or US resident — most importantly, the child must have a valid Social Security Number.
The SSN requirement — get it early
This is the practical hurdle for UK families. To claim the Child Tax Credit, the child must have a Social Security Number issued before the tax-return due date — an ITIN is not enough for this credit. For a child born in the UK to a US-citizen parent, that means registering the birth at the US Embassy (a Consular Report of Birth Abroad) and applying for the child's US passport and SSN. Start early; the process takes time, and without the SSN the credit is lost for that year.
The mistake that kills the refund: claiming the FEIE
Here is the trap. If you use the Foreign Earned Income Exclusion (Form 2555) to exclude your income, IRS rules stop you from claiming the refundable Additional Child Tax Credit. You can exclude your salary and feel like you have done the smart thing — and in doing so hand back up to $1,700 per child.
The fix is usually to use the Foreign Tax Credit instead of the FEIE. Because UK tax rates are typically higher than US rates, the Foreign Tax Credit normally eliminates your US income tax just as effectively — but, unlike the FEIE, it preserves your eligibility for the refundable credit. For a family with two children, choosing the Foreign Tax Credit over the FEIE can be the difference between a $0 refund and a $3,400 one. This is exactly the kind of election worth getting right, and our guide on choosing a US tax specialist in the UK explains what to look for.
How to claim it
You claim the Child Tax Credit and the refundable Additional Child Tax Credit on your Form 1040 using Schedule 8812. Pair it with Form 1116 (Foreign Tax Credit) rather than Form 2555, make sure each child's SSN is on the return, and confirm you meet the $2,500 earned-income threshold. The official rules are summarised on the IRS Child Tax Credit page. For the wider picture of what a US return from the UK involves, see how US tax returns work for Americans in the UK.
A quick worked example
Take an American mother in Manchester, employed locally, with two US-citizen children who both have SSNs. Her UK tax already exceeds her US tax, so using the Foreign Tax Credit she owes $0 of US income tax. She has well over $2,500 of earned income. On Schedule 8812 she claims the refundable Additional Child Tax Credit of $1,700 per child — a $3,400 refund from the IRS, despite owing no US tax. Had she instead excluded her income with the FEIE, that refund would have been $0.
Common Child Tax Credit mistakes
- Claiming the FEIE and unknowingly forfeiting the refundable credit.
- Not securing the child's SSN before the return due date.
- Assuming an ITIN is enough — it is not, for this credit.
- Missing the $2,500 earned-income threshold because all income was excluded.
- Failing to amend prior years where the refund was lost — refunds are often still claimable within the time limit.
How the refundable amount is actually calculated
It helps to understand why the refundable figure is what it is. The refundable Additional Child Tax Credit is not simply $1,700 handed to everyone — it is calculated as 15% of your earned income above $2,500, up to the $1,700-per-child cap. So a family needs enough earned income for the formula to reach the cap.
Work it through: with two children, the maximum refundable credit is $3,400 (2 × $1,700). To reach that under the 15% rule, you need earned income of roughly $25,167 above the $2,500 floor — about $27,667 of earned income in total. Most working parents clear that comfortably. The trap is not the formula; it is accidentally having no countable earned income because you excluded it all with the Foreign Earned Income Exclusion. Using the Foreign Tax Credit keeps your earned income on the return, so the formula works.
The Credit for Other Dependents ($500)
Not every child or dependent qualifies for the full Child Tax Credit — but there is a smaller backstop. The Credit for Other Dependents is a $500 non-refundable credit for dependents who do not meet the Child Tax Credit's requirements, such as a child aged 17 or over, or a dependent who has an ITIN rather than a Social Security Number.
For US families in the UK, this most often comes up with a child who is a US citizen but turned 17 during the year, or a dependent relative you support. The $500 credit is non-refundable, so it reduces US tax you owe but does not generate a refund the way the Additional Child Tax Credit does. Still, it is worth claiming where it applies, and it is easy to overlook.
Single parents and which parent claims
Where both parents are US persons, only one of them claims a given child in a year, and coordinating that matters — particularly if the parents file separately or are divorced. The general rule is that the parent with whom the child lived for the greater part of the year claims the credit, though there are tie-breakers and, for separated parents, the possibility of releasing the claim to the other parent.
For mixed-nationality couples — where one parent is American and the other is not — your filing status interacts with the credit. If you file as Married Filing Separately or use the joint election, make sure the children's Social Security Numbers and your earned income line up so the refundable portion is preserved. These small coordination points are where families most often lose money they were entitled to.
What if you haven't been filing at all?
Many American parents in the UK only discover their US filing obligation years after moving — often when they hear about the Child Tax Credit and realise they may have been entitled to refunds the whole time. The good news is twofold. First, the IRS Streamlined Foreign Offshore Procedures let non-willful filers catch up on three years of returns penalty-free, and those returns can include the Child Tax Credit. Second, the refundable credit can sometimes turn a catch-up that you feared would cost money into one that produces a refund.
One reassurance for UK families: claiming the US Child Tax Credit has no effect on your UK Child Benefit or UK tax — the two systems are entirely separate. You are not choosing between them; where you qualify, you can receive both. That is exactly why it is worth checking your eligibility properly rather than assuming the US side is not worth the effort.
Worth getting right every year
For US families in the UK, the Child Tax Credit is one of the few parts of the US system that pays you rather than costs you — but only if the filing choices line up. The combination of the right credit (FTC over FEIE), the right form (Schedule 8812), and the child's SSN is what turns it from theory into a refund.
