US Expats To Receive Coronavirus Stimulus Payments
By: 1040 Abroad
The draft bill would have excluded many expats who claim the Foreign Earned Income Exclusion to exclude their overseas income from US taxation, however, the final version of the law includes all Americans who live abroad.
Referred to as a Recovery Rebate in the Act, the economic stimulus payments for expats are paid automatically so long as expats meet the following two conditions: they have a US social security number, and they are up to date with their US tax filing.
The payments are worth $1,200 per adult who earns up to $75,000, or $2,400 for married couples who file a joint return who earn up to $150,000, plus $500 per dependent child under the age of 17.
For every $100 expats earn above these income levels the amount of the stimulus payment is reduced by $5 until it becomes zero at $99,000, or $198,000 for married couples.
The IRS is basing the payments on the adjusted gross income that expats report on their 2019 Form 1040, or if their 2019 return hasn't been filed, their 2018 Form 1040.
Stimulus payments are considered a tax refund, so they aren't taxable income in 2020. Payments will be made via direct deposit to a US bank account if one has been provided on the 2019 or 2018 tax return, or otherwise, a check will be mailed.
Olivier Wagner, a partner, and managing CPA at 1040 Abroad, said "Many expats haven't filed a US tax return from abroad because they weren't aware that US law requires them to. Fortunately, there's an IRS amnesty program for US expats called the Streamlined Procedure that allows them to catch up penalty-free, so these expats should now file as soon as possible to receive a stimulus payment."
1040 Abroad, a leading provider of tax preparation service for Americans living abroad is offering a tax prep discount to Americans who qualify for the full stimulus payment, to provide further financial assistance in what is a challenging time for everyone.
1040 Abroad provides more information about the Coronavirus relief CARES Act economic impact stimulus payments at https://1040abroad.com/
Read more: https://1040abroad.com/
Olivier Wagner, EA, CPA