My client was serving the U.S. in 2018 and was stationed in Japan with his pregnant wife. His wife gave birth in 2018, to their first child in Japan. Both parents are U.S. citizens. The parents received the child's birth certificate but no social security card. They were told to go to Social Security Administration and apply for a social security card for the child as soon as they went back to the United States. They did as they were told but the child was issued a social security card in 2019.
They prepared their 2018 income tax return without excluding their newborn, since they had no social for him. When they came back to the United States, they filed an amended 2018 tax return and listed the child as their dependent with the newly issued social security number.
The IRS sent them a letter stating the following:
"We can't allow your claim for credit. The taxpayer identification number assigned to your child was issued after the return due date. You cannot retroactively claim the CTC ACTC EIC. "
Is this correct? In my opinion, it doesn't seem fair to lose out on child credit if their child was born in 2018 but they couldn't go back to the U.S. until 2019 to apply for a social security card.
Is it worth it to write the IRS a letter explaining the situation? Please advise.
What you believe is unfair is the exact intent of Congress when these code sections were modified as part of the PATH Act of 2015. These are not inventions or interpretations of the IRS.
I'm not sure why your client was told that they have to be back in the States to apply for an SSN for their child when there is a well-established routine process to submit the application through/at the US Embassy in Japan and the military post would have guided him on that. I'm actually surprised that they went through the process at the Embassy to get their baby a passport but not the SSN.
Still an AllStar
More precisely, a U.S. consulate would have helped. There is one on Okinawa, where most American military are stationed. (Not that many are near the Embassy in Tokyo.) One website advises:
If you have access to a U.S. military post:
- You can go to the Post Adjutant or Personnel Office.
- These offices can copy and certify your records so you don't have to send original documents through the mail.
"They were told" might be true. Or it might be a way to cover up, "We forgot to ask."