A tax credit in the United States could reduce up to $500 in taxes if you send money to your relatives in Mexico and Canada.
An agreement between the three countries indicates that you can claim economic relief for dependents located in these two countries and obtain up to $500 from the credit.
The Child Tax Credit applies to taxpayers who are permanent residents or citizens and have one or more qualifying dependents according to eligibility criteria.
Dependents must be U.S. citizens, legal residents, have a Social Security number, an ITIN number, be foreign nationals residing in the country, or residents of Canada or Mexico.
This credit is valid for immediate family members, whether parents, children, siblings, uncles, nephews, grandchildren, and grandparents.
A minor living outside the United States, with the exception of Canada or Mexico, cannot be claimed as a dependent if they are not a U.S. citizen or a foreign national residing in the country.
However, it is very important to know that even if you meet these initial requirements, the support requirement is added: the taxpayer must have provided more than 50% of the support for the person in those regions through remittances.
To receive the credit, you must provide evidence such as a passport, proof that your dependents live abroad, and of the sustained money transfers.
It is clarified that this credit is not refundable, meaning you will not receive cash as a refund, it will only help reduce your taxes.
The tax filing season is open from December 29, 2023, and will remain open until April 15 of the next year, and this claim can be made for up to 3 previous years.
With the tax credit, U.S. citizens or residents in the country who regularly send money to Mexico, a country that receives 95 percent of its remittances from the United States, will greatly benefit.
In 2022 alone, Mexico received $58 billion from this concept, a 13.4 percent increase from 2020.
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