Kaine & Van Hollen Push For Child Tax Credit Eligibility For Government Employees Overseas

WASHINGTON, D.C. – Today, U.S. Senator Tim Kaine — a member of the Senate Foreign Relations Committee and the Senate Health, Education, Labor, and Pensions Committee — and Senator Chris Van Hollen (D-MD) sent a letter to Senate Majority Leader Chuck Schumer and Senate Finance Committee Chairman Ron Wyden pushing for clarification that American families serving overseas, such as U.S. Foreign Service members and other government employees, are eligible for the expanded Child Tax Credit.

As part of the American Rescue Plan Act (ARPA), the Senators successfully worked to expand the Child Tax Credit (CTC) and instruct the IRS to provide monthly checks ($250 for children aged 6 to 17 and $300 for children under 6) to millions of low-income families to help them pay for necessities like food, housing, and health care. However, some American families serving their country overseas are ineligible for the expanded tax cut, even if they meet the income thresholds, because the ARPA required Americans to have a “principal place of abode in the United States for more than one-half of 2021” in order to qualify for the credit. As the Senators push to extend the CTC expansion as part of the Build Back Better bill, they are working to ensure all eligible government employees can benefit from the CTC too. Extending the CTC would provide the largest tax cut to families with children ever and help lift thousands of children out of poverty. 

“Members of the Foreign Service and their interagency counterparts serve around the globe advancing our national security, interests, and values,” wrote the Senators. “They do so far from home, often under difficult and sometimes dangerous conditions, and their families experience a range of hardships and disruptions in terms of spousal employment, educational opportunities for their children, availability of medical care, physical security, and many facets of everyday life.”

“They deserve our continued support, and they should have access to the more generous child tax credit just like other American families. As we work to extend the expanded child tax credit, we should ensure we are not excluding employees of the United States government stationed outside of the United States,” the Senators concluded.

Approximately 1.6 million children in Virginia and 1.1 million children in Maryland have already benefited from the expanded Child Tax Credit.

To qualify for the monthly Child Tax Credit payments, families currently must have:

• Filed a 2019 or 2020 tax return and claimed the Child Tax Credit on the return; or given their information in 2020 to the IRS to receive the Economic Impact Payment using the Non-Filers: Enter Payment Info Here tool; and
• A main home in the United States for more than half the year (the 50 states and the District of Columbia) or file a joint return with a spouse who has a main home in the United States for more than half the year; and
• A qualifying child who is under age 18 at the end of 2021 and who has a valid Social Security number; and
• Made less than certain income limits: households earning less than $75,000 for single filers, $112,500 for heads of households, and $150,000 for joint filers.

A copy of the letter text can be found here and below:

Dear Majority Leader Schumer and Chairman Wyden,

We write to ensure that members of the United States Foreign Service and other government employees stationed overseas are eligible for the expanded Child Tax Credit. Congress and President Biden took bold action in the American Rescue Plan to expand the Child Tax Credit, send out advanced payments, and make the credit fully refundable. This expansion has helped tens of millions of families afford basic necessities, providing low- and middle-income parents with money to pay for food, housing, health care, and school-related costs.   

Some American families serving their country overseas, though, are ineligible for the expanded credit. The American Rescue Plan requires residents to have a “principal place of abode in the United States for more than one-half of 2021” in order to qualify for the credit. Many Americans serving our nation spend extended time on tours in foreign countries, temporarily relocating their families overseas for several years prior to returning to their stateside home. For members of the military stationed overseas, there is a provision in the Internal Revenue Code that clarifies that their primary place of abode is still in the United States even if they are serving overseas on an extended basis. There is no similar clarification for members of the Foreign Service or other government employees on similar assignments, thus leaving many ineligible for the expanded credit even if they meet the income thresholds. 

Members of the Foreign Service and their interagency counterparts serve around the globe advancing our national security, interests, and values. They do so far from home, often under difficult and sometimes dangerous conditions, and their families experience a range of hardships and disruptions in terms of spousal employment, educational opportunities for their children, availability of medical care, physical security, and many facets of everyday life.  Many of them call Virginia or Maryland home. They deserve our continued support, and they should have access to the more generous child tax credit just like other American families. As we work to extend the expanded child tax credit, we should ensure we are not excluding employees of the United States government stationed outside of the United States.

We appreciate your attention to this matter and look forward to continuing to work with you in support of our dedicated public servants abroad.

Sincerely,

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