Claiming Dependents on Your U.S. Tax Return as an Expat

Claiming a dependent on your U.S. tax return reduces your taxable income and may qualify you for valuable tax credits. For expat filers, the rules around dependents have some important nuances that differ from the standard domestic situation — particularly around the citizenship and residency requirements for who can be claimed, and the requirement that every dependent have a U.S. Tax Identification Number.

Many expat filers assume they cannot claim their children as dependents because the children are not U.S. citizens or do not live in the United States. In many cases, that assumption is wrong — and missing a legitimate dependent claim means leaving money on the table.

One of the most important and least-known rules for cross-border filers: children who are residents of Canada or Mexico may qualify as your dependent even if they are not U.S. citizens and even if they do not live with you.

Generally, a dependent must be a U.S. citizen, U.S. resident alien, or U.S. national. However, there is a specific exception for residents of Canada and Mexico — meaning that if your child lives in Canada or Mexico and meets the other applicable tests, you may be able to claim them on your U.S. return regardless of their citizenship.

This is particularly relevant for Americans living in Canada with Canadian-born children, cross-border families where children live on the other side of the border, and Americans who have relocated and whose children have not acquired U.S. citizenship.

If your children are residents of a country other than Canada or Mexico, they must be U.S. citizens, U.S. resident aliens, or U.S. nationals to qualify as your dependent.

Before applying either the Qualifying Child or Qualifying Relative test, three baseline rules apply to all dependent claims:

You cannot be claimed as a dependent yourself. If you or your spouse (if filing jointly) could be claimed as a dependent by another taxpayer, you generally cannot claim dependents on your own return — unless that other taxpayer is filing solely to claim a refund of estimated tax paid or tax withheld.

You cannot claim a married person filing jointly. A married person who files a joint return with their spouse cannot be claimed as your dependent — unless that joint return is filed solely to claim a refund of income tax withheld or estimated tax paid.

The dependent must meet the citizenship or residency requirement. As noted above, the dependent must be a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico.

Every dependent must have a U.S. Tax Identification Number. This is either a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN). A dependent without a valid TIN cannot be claimed on your return. If your dependent does not have an SSN and is not eligible for one, an ITIN application (Form W-7) must be filed. AET can assist with ITIN applications as part of your tax preparation — see the Additional U.S. Tax Support section on our U.S. Tax Returns page for pricing.

To claim someone as a qualifying child, all five of the following criteria must be met:

1. Relationship The child must be your son, daughter, adopted child, stepchild, foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister, or a descendant of any of them (for example, your grandchild or niece or nephew). An adopted child is always treated as your own child, including a child lawfully placed with you for adoption.

2. Age The child must meet one of the following age criteria:

• Under age 19 at the end of the year and younger than you (or your spouse, if filing jointly)
• Under age 24 at the end of the year, a full-time student, and younger than you (or your spouse, if filing jointly)
• Any age, if permanently and totally disabled

3. Residency The child must have lived with you for more than half of the year. There are exceptions for temporary absences, children who were born or died during the year, children of divorced or separated parents who live apart, and kidnapped children.

4. Support The child must not have provided more than half of their own support for the year. If the child earned income and paid for more than half of their own expenses, they may not qualify.

5. Joint return The child cannot file a joint return for the year — unless the child and their spouse had no separate filing requirement of their own and filed the joint return only to claim a refund.

Qualifying child of more than one person If a child meets the criteria to be a qualifying child of more than one person — for example, in a divorced or separated family situation — generally only one person can claim the child as a qualifying child in a given year. Specific tiebreaker rules determine which person is entitled to the claim. Your Tax Specialist can help navigate this if it applies to your situation.

If someone does not meet the Qualifying Child test — for example, because they are an adult, an elderly parent, or a child who does not live with you — they may still qualify as a dependent under the Qualifying Relative test. All four of the following criteria must be met:

1. Not a qualifying child The person cannot be your qualifying child or the qualifying child of any other taxpayer. This test is applied first — if someone could be claimed as a qualifying child by anyone, the qualifying relative rules do not apply.

2. Relationship or household member The person must either:

• Be related to you in one of the following ways: child (including step, foster, in-law, and adopted), lineal descendant of a child, brother or sister (including half, step, and in-law), parent or grandparent (including other direct descendants, in-law, and stepparents), niece or nephew (including child of a half-sibling), aunt or uncle; or
• Have lived with you all year as a member of your household, and your relationship must not violate local law

3. Gross income The person’s gross income for the year must be below the IRS threshold, which is adjusted annually for inflation. Check IRS Publication 501 for the current figure. There is an exception for persons who are disabled and have income from a sheltered workshop.

4. Support You must have provided more than half of the person’s total support for the year. There are exceptions for multiple support agreements and children of divorced or separated parents.

Claiming a dependent on your U.S. return may make you eligible for one or more of the following tax credits. Credits reduce your tax liability dollar for dollar — they are more valuable than deductions, which only reduce taxable income.

Child Tax Credit Available for each qualifying child under age 17 at the end of the tax year who has a valid SSN. The credit amount and phase-out thresholds are adjusted periodically — your Tax Specialist will calculate the amount applicable to your situation. Note that the Child Tax Credit requires a Social Security Number specifically — an ITIN is not sufficient for this credit.

Additional Child Tax Credit A refundable portion of the Child Tax Credit that may result in a refund even if you owe no U.S. tax. Eligibility depends on your earned income and the amount of your Child Tax Credit that exceeds your tax liability.

Child and Dependent Care Credit Available if you paid someone to care for a qualifying child under age 13 (or a qualifying dependent who is incapable of self-care) so that you could work or look for work. The credit is calculated as a percentage of qualifying care expenses up to a set limit. For expat filers, the care must generally be provided in a location where you are working — care provided in a foreign country while you work in that country typically qualifies.

Other Dependent Credit A non-refundable credit of up to $500 for each qualifying dependent who does not qualify for the Child Tax Credit — including qualifying relatives, older children, and dependents with ITINs rather than SSNs. This credit is particularly relevant for expat filers claiming non-citizen dependents who cannot obtain an SSN.

Education Credits If you have a dependent who is a student in a qualifying U.S. educational institution, education credits — including the American Opportunity Tax Credit and the Lifetime Learning Credit — may be available. These are less common for expat filers whose dependents typically attend non-U.S. institutions, which generally do not qualify.

Claiming a child as a dependent on your return does not eliminate their own potential U.S. filing obligations. If your dependent child is a U.S. citizen or resident alien and has income above the applicable threshold, they may be required to file their own U.S. return.

For children with investment income above a certain threshold, the Kiddie Tax rules may apply — meaning a portion of the child’s unearned income is taxed at the parent’s marginal rate rather than the child’s rate. This is a separate calculation from the dependent claim itself.

AET’s Dependent Return package ($375) is available for dependents filed alongside a parent or guardian’s return. It covers straightforward dependent situations — no Kiddie Tax, PFICs, Form 8938, business income, or rental income. See the U.S. Tax Returns page for details →