Important Coronavirus Relief Updates for Expats

The Coronavirus Aid, Relief and Economic Security (CARES) Act was passed in late March to provide assistance to American individuals and businesses affected by the COVID-19 outbreak.

It includes a stimulus payment for Americans, including expats, who meet certain criteria: having a US social security number, being up to date with their US tax filing, and having an adjusted gross income of under $99,000 ($198,000 for married couples filing jointly, although the full payment amount requires a maximum adjusted gross income of up to $75,000, or $150,000 for couples).

An additional $500 per child is paid to qualifying Americans with dependent children who have US social security numbers and are under the age of 17.

Many questions have arisen regarding CARES Act stimulus payments for expats, and the IRS has been regularly publishing new details about both qualifying and implementation.

Some of these questions revolve around how claiming the Foreign Earned Income Exclusion or the Foreign Tax Credit affects adjusted gross income, and so eligibility to receive a stimulus payment. The short answer is that the FEIE reduces adjusted gross income, while the FTC doesn’t.

Another frequently asked question relating to stimulus payments for expats is whether having a foreign spouse (and their filing status) affects eligibility. The short answer is yes, especially if you make the election to file a joint return with a foreign spouse who doesn’t have a US social security number.

Expats also often ask how they can provide their bank account details to receive a stimulus payment by direct deposit, and whether stimulus payments can be paid into a non-US bank account. Expats can provide their bank details on their 2019 tax return if they didn’t on their 2018 return, or they can use the new IRS Get My Payment online tool. The IRS isn’t currently making stimulus payments into non-US bank accounts.

Katelynn Minott is partner and managing CPA at Bright!Tax. Bright!Tax, AARO, and US expat tax attorney Monte Silver are holding a webinar to address these and many other questions relating to the Coronavirus relief stimulus payments for expats (and including expat small business owners) in greater detail on Tuesday May 5th. You can register for the webinar here - https://brighttax.com/blog/webinar-updates-coronavirus-relief-american-expats-small-business-owners/

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