Child tax benefit on a deceased child - SS5 -

QUESTION:

My husband is an American citizen but permanent Canadian 
resident we had a child in May last year whom we lost in 
September.  We are also expecting again this August we are 
wondering how to file for his American Child tax benefit as 
our accountant has no idea.

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david ingram replies:

As a US citizen, your husband MUST file his US tax return no matter where he lives and no matter what the source of the earnings or capital gains or interest or dividends or royalties or self employed occupation,.

It can also have some rude RESULTS.

For instance, I am preparing a return for one US CITIZEN lady at the moment whose salary is less than $40,000 Canadian but owes the IRS $44,703 US because she has sold her home in a downsizing move and owes the IRS tax on the $565,000 profit she made on the house. The first $250,000 US is tax free but the $315,000 excess is taxable and even triggers a $7,106 Alternative MINIMUM TAX (AMT).

Assuming that your husband has been filing, he will need to fill in a form SS-5 for your child to get a Social Security Number. An application is available at http://www.ssa.gov/online/ss-5.pdf

The SSN application needs original documentation (Birth Certificate, etc.) to be submitted or you can send in certified copies if they are certified by a US NOTARY.  A Canadian Notary or Lawyer's certification is not sufficient.

If you go to a US consular office, they will certify your documents for you and put a nice Consular Seal on them.  There is usually no charge for this service.

You can find a list of all US Consular offices in Canada at: http://www.amcits.com/consulates.asp
If you can not find a US office, live int he North, etc., you will have to find a US notary.  Strangely, there are quite a few because there are a lot of Canadian lawyers who attended US law schools and have practiced in the US and kept their positions.

You will have to look around.

My preference is that you take the  prepared US return and the completed  SS5 and go to a US social Security office in a border town and give the SS office the paperwork.  They will certify whatever they need and take the tax return as well.

For BC people, the closest office is at 104 Magnolia (corner of Cornwall) in Bellingham.

To find another office near you, goto http://www.ssa.gov/regions/

The credit is usually worth $1,000 to you.  It can be worth the trip and it will get you established for next year. 

If I were you, with another child due in August, I would file US form 4868 to get an automatic extension until Oct 15 to file the 2007 US return.  I would then get the numbers for both children at the same time.

You can then file the 2007 return anytime before Oct 15th.

Hope this helps.

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