No, they did not, not like that. Non-resident children are not eligible to be claimed for the credit, period. This is outright fraud being winked at by the government.
According to IRS, they are eligible: Under Nationality it says you have to be a resident of US, CANADA OR MEXICO..it also talks about relationship and guess what, descendant like niece or nephew qualifies.
From IRS website:
The Working Families Tax Relief Act of 2004 set a uniform definition of a qualifying child, beginning for Tax Year 2005. This standard definition applies to all five of the tax benefits noted above, with each benefit having some additional rules.
In general, to be a taxpayer’s qualifying child, a person must satisfy four tests:
Relationship — the taxpayer’s child or stepchild (whether by blood or adoption), foster child, sibling or stepsibling, or a descendant of one of these.
Residence — has the same principal residence as the taxpayer for more than half the tax year. Exceptions apply, in certain cases, for children of divorced or separated parents, kidnapped children, temporary absences, and for children who were born or died during the year.
Age — must be under the age of 19 at the end of the tax year, or under the age of 24 if a full-time student for at least five months of the year, or be permanently and totally disabled at any time during the year.
Support — did not provide more than one-half of his/her own support for the year.
Additional Rules
While the four qualifying child tests generally apply for the five tax benefits noted above, there are some additions or variations for particular provisions:
Dependent — a qualifying child must also meet these tests:
Nationality — be a U.S. citizen or national, or a resident of the U.S., Canada or Mexico. There is an exception for certain adopted children.
Marital status — if married, did not file a joint return for that year, unless the return is filed only as a claim for refund and no tax liability would exist for either spouse if they had filed separate returns.
During closed-door negotiations last week, House and Senate leaders stripped a key provision from the payroll tax cut bill that would have prevented illegal aliens from qualifying for the additional child tax credit (ACTC). Leaders caved on the language in spite of an U.S. Inspector General report revealing that illegal aliens received $4.2 billion in refundable tax credits in 2010, primarily through the ACTC. (See TIGTA Report 2011-41-061, July 7, 2011;
The provision members struck from the bill – similar to legislation introduced by Rep. Sam Johnson (R-TX), Rep. Jack Kingston (R-GA), and Senator David Vitter (R-LA) – would close this tax credit loophole by requiring that individuals who claim the ACTC provide a valid Social Security Number (SSN). Currently, the IRS only requires applicants for the ACTC to provide an Individual Taxpayer Identification Number (ITIN), which the Internal Revenue Service (IRS) indiscriminately hands out to illegal aliens.
http://www.alipac.us/content/congress-opts-continue-giving-tax-dollars-illegal-aliens-196/