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Can I declare my nonresident alien children as my dependents and claim child tax credit & claim for the stimulus fund credit

Forum|Forum|5 years ago
January 22, 2021
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I am on L1 visa & my wife & child are on L2 visa. As per the Substantial Presence Test me and my wife are resident alien considering our presence in the previous years(2019, 2018, 2017), but our child travelled to the US for the very first time on 19th Sept,2020 (born in 2020). I have a couple of questions :

1) Will i be able to claim my child as dependent for child tax credit ? As per the definition of "first year choice" in pub 519, I believe I can claim dependent once my child pass the SPT in 2021 which will be on 26th May,2021. So I'll have to apply for a filing extension and file for my taxes post 26th May,2021. Can you please confirm ?

2) My child still do not have an ITIN (I am planning to apply one along with my returns with w7). Will i be able to claim for the stimulus fund credit(recovery rebate credit) for my child ?

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Best answer by Opus 17

You can claim your child as a dependent if the child lived with you more than half the nights of the year since it was born. The child does not need to pass the substantial presence test as long as the parents passed the substantial presence test, and the child lived with the parents for more than half the year, or more than half the nights that the child was alive if the child was born in 2020.

However, the child will only qualify for a $500 “other dependent“ tax credit. The child does not qualify for the $2000 child tax credit or the stimulus payment/recovery rebate unless it has a Social Security number. If the child is not eligible to apply for a Social Security number, you cannot get these tax benefits.

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AmeliesUncle

@varshil_shh wrote:
1) Will i be able to claim my child as dependent for child tax credit ? As per the definition of "first year choice" in pub 519, I believe I can claim dependent once my child pass the SPT in 2021 which will be on 26th May,2021. So I'll have to apply for a filing extension and file for my taxes post 26th May,2021. Can you please confirm ?

2) My child still do not have an ITIN (I am planning to apply one along with my returns with w7). Will i be able to claim for the stimulus fund credit(recovery rebate credit) for my child ?

1) Yes, I believe so. I don't see anything that restricts a child or dependent from making the First Year Choice. However because your child will have a ITIN rather than a Social Security Number, the Child Tax Credit is limited to $500.

2) No. A person must have a Social Security Number to qualify for the Stimulus/Recovery Rebate credit.

TurboTax is not set up for dealing with a dependent that does not yet have an Identification Number. Between that and needing to file the W-7, you may consider a tax professional. A "Certified Acceptance Agent" may be able to file the W-7 without you needing to mail in your child's important documents.

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Opus 17Answer

Employee

You can claim your child as a dependent if the child lived with you more than half the nights of the year since it was born. The child does not need to pass the substantial presence test as long as the parents passed the substantial presence test, and the child lived with the parents for more than half the year, or more than half the nights that the child was alive if the child was born in 2020.

However, the child will only qualify for a $500 “other dependent“ tax credit. The child does not qualify for the $2000 child tax credit or the stimulus payment/recovery rebate unless it has a Social Security number. If the child is not eligible to apply for a Social Security number, you cannot get these tax benefits.

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Opus 17

Employee

You said “children” in your question, is there more than one child? A child not born in 2020 could not be claimed as your dependent unless the child lived with you for more than half the year.