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Tax Guide

Federal Stimulus FAQ: Who Is Eligible, How Much Money Will They Get? U.S Based Taxpayers, Expats, Non-residents & More

Federal Stimulus FAQ: Who Is Eligible, How Much Money Will They Get? U.S Based Taxpayers, Expats, Non-residents & More
Ines Zemelman, EA
26 March 2020

Update: The IRS has reversed their stance and senior citizens, Social Security recipients, and railroad retirees who are not otherwise required to file a return will not have to. Since the IRS would not have information regarding any dependents for these people, each person would receive $1,200 per person, without the additional amount for any dependents at this time.

Part of the proposed package includes direct monetary payments from Uncle Sam to US Taxpayers. We explain in detail below who is eligible, what they can expect, when they can expect it, and if they will have to pay tax.

Who is eligible for stimulus checks?

US tax residents with social security numbers, residing anywhere in the world, will receive checks depending on their income, which we outline below. Those with ITIN will not be eligible.

  Filing mandatory 
  • To be eligible, you must have filed a return in 2018 or 2019.  If you have not yet filed, the IRS urges you to do so now.
  • Those who do not file because they are below thresholds will need to file to receive economic impact payment.
    • Low-income taxpayers, some veterans and individuals with disabilities who are otherwise not required to file a tax return will not owe tax, but need to file to be eligible. Else, the government cannot determine if you are eligible, or delinquent in filing.

Is this a tax credit or a gift from the government?

This stimulus check is essentially a 0% interest advance from the government for your 2020 tax return. This is NOT the same thing as the 2008 stimulus checks that were sent to battle the recession. This article explains the difference well.

How much will taxpayers receive?

The amount taxpayers will receive today will depend on their 2019 income (if already filed), or 2018 if not. The end amount taxpayers will receive will ultimately depend on their 2020 income.

The figure to look at is the amount of adjusted gross income (Line 8b) If you earned less than the first table (low threshold), you will receive the full amount. The amount is reduced by $5 for every $100 exceeding the lower threshold. Once you reach the upper threshold (right column), the amount is completely phased out. If you filed your 2019 return, the numbers will be based off of that. If you have not, the 2018 figure will be used. If you have not filed - get in touch with us ASAP to get started.

If you have no income, you will still be eligible for a check if you have no income or if you rely solely on non-taxable government benefit programs (such as Supplemental Security Income benefits (SSI))

Lower threshold and below: $1,200 per adult & $500 per child under the age of 17

In between: Phase out reduction of $5 per $100 exceeding lower threshold.

Above upper threshold: $0

Stimulus Check Amounts
Filing Status Lower Threshold Upper Threshold
Individuals (includes MFS, QW) Less than $75,000 $99,000
Head of Household  Less than $112,500 $136,500
Married Filing Jointly (MFJ) Less than $150,000 $198,000

What if my 2020 income will be different?

As above, the government will use 2019 tax returns to determine payment amounts, and 2018 if 2019 is not yet available.

The checks will be an advanced credit from the government towards your 2020 return. As such, if your 2020 income drastically differs from the income the checks are based upon, this will be equalized in 2021 when you file your 2020 tax return.

Example: In 2019 (filed), you earned $150k as an individual. This makes you NOT ELIGIBLE for receiving a stimulus check as of right now. Your 2020 income drops to $40k; you will receive a credit of the eligible amount ($1200 per individual + $500 per child) for your 2020 tax return. This is the equivalent of you having made too many advanced payments to the IRS.

If, instead you earned substantially more in 2020 than 2019, this will be taken into account on your 2020 tax return. 

Be Careful - Inconsistent Reporting Of Tax Treatment!

Some news outlets have reported that if your income is higher in 2020, you will not have to 'pay the government back'.  We believe this may not be correct.

The amount is not a 'gift' but an advance credit, with 0% interest, on your 2020 tax return. Generally, if the IRS gives you money that you must pay back later (ie if you underpay your estimated taxes), they charge you interest. They will not charge interest on this credit. However, the amount of the credit received will eventually depend on your 2020 adjusted gross income. 

We will update this guide once the IRS releases their FAQ. 

Who will not receive stimulus checks?

  • Anyone without a social security number
  • Non-Resident Aliens
  • Households do not receive money for adult dependents, such as elderly relatives or adult children with disabilities.

How do I sign up?

You don't. There's no sign up. The payments will be automatic for those who qualify.

You do not need to call the IRS. See the special website the IRS created for coronavirus updates.

Will the stimulus money be taxed?

No. The stimulus money is not considered income. These are considered a credit towards your 2020 taxes. When a taxpayer’s 2020 taxes are filed on April 15, 2021, these advance payments might be adjusted upward or downward as with any other non-refundable credit.

How will I receive the money? Check or via electronic deposit?

If you have received a tax refund via direct deposit in the past, the IRS has your bank account information and once details are finalized, they are expected to direct deposit the payments, to those eligible, to their bank accounts. 

  • Direct deposit if the IRS has bank account information from prior refunds
  • Social Security recipients who are not required to file a return: IRS will use the information on the Form SSA-1099 or Form RRB-1099
  • The IRS will not be reviewing your FBAR or 8938 bank account information to find direct deposit information.
  • If not, check mailed to "last known address"

If not, the IRS will mail a check to your "last known address".

If the IRS does not have your direct deposit information, in a few weeks the US Government will be setting up a website where taxpayers may input banking info to receive direct deposits instead of mailed checks. Details to come.

The fastest way to get this information would be to file your 2019 return soon, so that they have your up to date information when the bill is ready to be passed. The Treasury is exploring more options (debit cards, etc) - but this is just hearsay at the moment.

When will I receive the money?

Press briefings have indicated 3 weeks if the IRS is able to do direct deposit. Paper checks will inevitably take longer, especially for those residing abroad.

Additional FAQ:

Is it better to estimate my 2019 taxes now (since I won't receive my XXX tax return until June), or should I file the extension, and let the stimulus check be based on my 2018 return?

We recommend to file an extension now, and file your 2019 return as soon as you are ready. In the end, the final amount of money you receive will be clarified on your 2020 tax return (in 2021). But, if your 2018 return made you ineligible for a stimulus, and your 2019 return would make you eligible, you should file your 2019 return ASAP to get money now instead of spring 2021 (in the form of a refund on your 2020 return).

I've never had a refund (I've always paid tax) - will the stimulus check be sent to the address on my return?

Yes - the funds will be sent to the last known address

I won't have US income during 2020, and henceforth no US taxes for 2020. Does that mean if I receive an automatic payment from the IRS now that I would have to pay back the sum 2021?

Your qualification is based upon your worldwide income, from all sources. The IRS will make a determination on if you are eligible & how much stimulus you should receive based off of your 2019 (or 2018). Then, in 2021 when you file your 2020 return, you will either receive more or less, depending on how your 2020 tax return goes.

Can someone still qualify if they are Married filing Separately?

 Yes, If you filed Married filing Separately, for the Stimulus check you will qualify as Single.

How can I get my address changed, or update my bank account or have my funds sent electronically to my bank account?

File your 2019 return as soon as possible. 

I have never filed my taxes since I moved from the US 3+ years ago and I need to receive the stimulus check, what do I do?

If you are not in the system, the IRS won't be able to determine if you are eligible.

To become current with your taxes, you can begin that process with the IRS amnesty program. You can read more about this program and sign up here:

Do I still qualify if I am a US expat living abroad, but don't have to file a tax return because I receive only social security, or SSI (Supplemental Security Income to help aged, blind, and disabled people, who have little or no income)?

Yes, you qualify. The IRS will use the information on the Form SSA-1099 or Form RRB-1099 to generate Economic Impact Payments to recipients of benefits reflected in the Form SSA-1099 or Form RRB-1099 who are not required to file a tax return and did not file a return for 2018 or 2019. This includes senior citizens, Social Security recipients and railroad retirees who are not otherwise required to file a tax return. 

Ines Zemelman, EA
founder of Taxes for Expats