A missionary couple (and their children) lives overseas for over half the year, while maintaining a home in the U.S. Both are US citizens. Do they qualify for the Earned Income Credit?
First, there are three potential credits that could be affected by residency status.
Earned Income Credit (EIC) (refundable) - See IRS Publication 596Child Tax Credit (non-refundable) - Up to $1,000 per qualifying childAdditional Child Tax Credit (refundable) - This credit is for certain individuals who get less than the full amount of the child tax credit. If the taxpayer did not live with his child in the United States for at least six months of the tax year, he cannot claim the EIC.
But a taxpayer may be able to claim the Child Tax Credit or the Additional Child Tax Credit even though he did not live in the United States at least six months of the current tax year.
It is often advantageous for a foreign missionary to claim a Foreign Earned Income Exclusion using Form 2555, thereby exc…