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Stimulus Payments

FOR
EXPATS ABROAD

Table of Contents:

How US Expats abroad can receive the Stimulus Payments for the Covid 19 Pandemic?

We all know that the pandemic has wreaked havoc around the world since the beginning of 2020. In response to that, the US government has so far issued 3 checks/payments ranging from $600 to $1400. A fourth check may or may not come in 2021. Fingers crossed.

The most common problem in getting Stimulus payments for expats abroad is that most of them do not file taxes as their income is too low or have no income abroad. They might also not have a US bank account or a US mailing address. If you haven’t received it for whatever reason, if you’re eligible, you can file your 2020 and 2021 tax returns to claim it as a refund.

Who is Eligible to receive ?

If you are a US Citizen, in the US or anywhere abroad, you are eligible to receive them if you meet the income threshold and have a valid SSN for work. If you have kids, even better, you receive an additional $500-$600 in benefits. 

These (Stimulus Payments for Expats Abroad), also referred to as Economic Impact Payments(EIP) by the IRS are a form of an advance tax credit. It’s free money from the government and they are not taxable on your Tax Return. 

stimulus payment for expats abroad
Stimulus Payment Check

Let's talk about the 1st EIP

The 1st two EIPs were given out in early March 2020 and the 2nd was given out by January 4th, 2021. You were eligible for the first Economic Impact Payment if you are a U.S. citizen or U.S. resident alien, you were not claimed as a dependent of another taxpayer, and have a social security number valid for employment. 

Payments of $1,200 ($2,400 for a joint return) to individuals whose adjusted gross income (AGI) did not exceed:

  • $150,000  if married and filing a joint return
  • $112,500 if filing as  head of household or
  • $75,000  for eligible individuals using any other filing status
    Payments were reduced by 5% of the amount by which your AGI exceeds the applicable threshold above.

$500 was given for each eligible dependent child under the 1st EIP.

You (expats abroad) are not Eligible for the first Stimulus payment if:

  • You were claimed as a dependent on another taxpayer’s return (for example, a child or student who may be claimed on a parent’s return or a dependent parent who may be claimed on an adult child’s return).
  • You are a nonresident alien.
  • You do not have a Social security number that is valid for employment.

For couples filing jointly, both needed to have an SSN. If only one did, then a partial payment was made. 

For aliens who received a payment but are not a qualifying resident alien for 2020 should return the payment to the IRS (students who incorrectly filed a Resident Tax Return in 2019) fall in this category. They must amend their previous year Tax Return and return the payment back to the IRS here.

The Second Economic Impact Payment

The Second EIP was made around the end of December 2020 and early 2021, Taxpayers started to get checks from the IRS. The IRS has listed the below conditions for getting the second payment.

Who is Eligible for the 2rd Economic Impact Payment?

If you’re a U.S. citizen or U.S. resident alien, you may be eligible for $600 ($1,200  for a joint return), plus $600 for each qualifying child, if you (and your spouse if filing a joint return) aren’t a dependent of another taxpayer on a 2019 tax return, have a social security number (SSN) valid for employment (see exception when married filing joint) and your adjusted gross income (AGI) does not exceed:

  • $150,000 if married and filing a joint return or if filing as a qualifying widow or widower;
  • $112,500 if filing as head of household; or
  • $75,000 for eligible individuals using any other filing status

Your payment will be reduced by 5% of the amount by which your AGI exceeds the applicable threshold above.

If you weren’t eligible to receive the second payment, similar to the 1st payment given above, you could still claim the payments on your 2020 Tax Return on Line 30.

Notice 1444 or 1444-B were given out to the Taxpayers for the 1st & the 2nd Economic Impact Payments.  Those who received these notices, but did not receive the payment can check your account here.

The Third Economic Impact Payment

Under the American Rescue Plan Act of 2021, the third round of Economic Impact Payment was announced as an advance payment for the 2021 Recovery Rebate Credit.

Under the Act, each eligible US Citizen/Resident will get $1400 as relief, which is higher than the first two EIPs.

The IRS has already started making payments since march, 2021 and continues to do so each week in a phased manner.

Who is Eligible for the 3rd Economic Impact Payment ?

As per the IRS, due to new income limitations, some individuals won’t be eligible for the third payment even if they received a first or second Economic Impact Payment or claimed a 2020 Recovery Rebate Credit.

Generally, someone is eligible for the full amount of the third Economic Impact Payment if they:

  • are a U.S. citizen or U.S. resident alien (and their spouse if filing a joint return), and
  • are not a dependent of another taxpayer and
  • their adjusted gross income (AGI) is not more than:
    • $150,000 if married and filing a joint return or if filing as a qualifying widow or widower
    • $112,500 if filing as head of household or
    • $75,000 for eligible individuals using any other filing status

These income limits do phase out pretty quickly which means  people will not receive a payment if their AGI is at least:

  • $160,000 if married and filing a joint return or if filing as a qualifying widow or widower
  • $120,000 if filing as head of household
  • $80,000 for eligible individuals using any other filing status

As an US Expat, you can check the status of your 3rd Economic Impact Payment here assuming you qualify. Like previously mentioned, you must have an SSN to receive these payments. Your expat dependent with SSN will get $1400 each as well.

Few FAQs
for the US Expats Abroad regarding Stimulus Payments

Can the IRS make the payment to my Foreign Bank Account ?

No, this is not possible. You need a US bank account to get your EIP directly. If the IRS doesn’t have the bank details, a check would be issued. You can find more details about payments here

For US Expat who haven’t filed Taxes for a while, are they eligible ?

It’s always a good practice to file returns each year. However, you could still file your 2020 Tax Return and claim the benefit under Recovery Rebate Credit for the 1st two EIPs. Refer this page for more info.

Do I have to pay back the amount I received ?

In some cases, this has actually happened, where people who weren’t eligible got the checks when they weren’t supposed to. Usually foreign students who incorrectly filed a resident tax return, when they were supposed to file a Non-Resident one. In that case, you have to pay the amount back to the IRS.  All the details about returning the check to the IRS is here 

If you are an eligible US resident with SSN, you don’t need to return it. Since times are difficult right now, you may want to use it wisely.

I was claimed as a Dependent on my Parent’s Tax Return in 2019. For 2020,I’m filing on my own. I haven’t received any Stimulus Payment.

In this case, you can simply file your Tax Return for 2020 and claim it as a refund on Line 30 as Recovery Rebate credit(assuming you are eligible).

You may have several questions on the Economic Impact Payments. There is also a possibility of the 4th Economic Impact Payment to add to this chaos. 

Please feel free to contact us or drop us an email at [email protected]