During the COVID-19 pandemic, the US government passed three major laws that included stimulus payments for Americans living in the US and abroad. Reviewing these details will help U.S. expats determine if you are eligible for the third stimulus check and if you can claim a recovery relief refund on your 2020 tax return.
Do expats receive stimulus checks?
Yes, expats have been able to qualify for all three rounds of Coronavirus stimulus payments. All US citizens are eligible, regardless of whether they live in the United States or abroad.
Third Stimulus Check for COVID-19 Relief: What You Need to Know
On March 11, 2021, President Biden signed into law the American Rescue Plan Act – a $ 1.9 trillion coronavirus relief bill that includes stimulus payments for individuals, expanded child tax credits, aid for state and local governments and funds for vaccine distribution.
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Stimulus Payments Under the American Rescue Plan Act
The law includes a third stimulus payment of up to $ 1,400 per person for Americans in the US and abroad.
Expats eligible for the total stimulus payment of $ 1,400 include:
Individuals earning up to $ 75,000 a year
Married couples earning up to $ 150,000 a year
Americans abroad who earn more than these thresholds will receive a portion of the payment, and the payments will be eliminated entirely at $ 80,000 for individuals and $ 160,000 for married couples.
Additionally, families will receive $ 1,400 per dependent, which, unlike the previous two stimulus payments, includes adult dependents for the first time.
For this third stimulus check, eligibility will be based on your income as reported on your most recent tax return for tax year 2019 or 2020. This means that if you lost income in 2020 due to the COVID-19 pandemic, Quickly file your expat tax return to qualify for the maximum stimulus payment.
U.S. expats who have an established direct deposit with the IRS are expected to begin receiving their third stimulus payments within days of the law being signed. Expats without direct deposit will receive paper checks, which will likely be mailed several days after direct deposit payments begin. Expats can check the status of their payment using the IRS Get My Payment tool.
Unemployment tax benefits
The American Rescue Plan Act also comes with other tax changes, including a tax exclusion for unemployment benefits. Under the law, households with annual incomes less than $ 150,000 can exclude the first $ 10,200 of unemployment benefits from taxes.
Expansion of the Child Tax Credit under the American Rescue Plan Act
The law also expands the child tax credit for American families in the US and abroad. During his campaign for office, President Biden’s tax plan has proposed increasing the Child Tax Credit and making it fully refundable, which is exactly what this legislation does.
Before the American Rescue Plan Act, the child tax credit worked like this: The tax credit was worth $ 2,000 per dependent child under 17 with a Social Security number. The credit began to be eliminated for married couples with incomes greater than $ 400,000 ($ 200,000 for single taxpayers / heads of household). Up to $ 1,400 was refundable (meaning the tax credit could make you eligible for a refund) for some low-income families, but you must have earned at least $ 2,500 to get a refund.
The American Rescue Plan Act will include, for one year, the following changes to the Child Tax Credit in 2021:
Expand the credit to 17-year-olds
Increase the amount of the tax credit to $ 3,000 ($ 3,600 for children under 6 years old)
Makes the Child Tax Credit fully refundable and eliminates the $ 2,500 minimum income requirement
Eliminate the credit for married couples making more than $ 150,000 ($ 75,000 for single filers). Those who earn above these thresholds still qualify for the original Child Tax Credit amount of $ 2,000 per child, as long as their income is less than $ 400,000 for married couples ($ 200,000 for single taxpayers).
Enter periodic payments for families