COVID 19 Relief for US Expats: Economic Impact Payments

Economic impact payments are due to be distributed automatically within the next three weeks to support American citizens and Green Card Holders struggling financially due to the economic effects of the Coronavirus.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, was passed on March 27 and provides economic support for all American citizens and Green Card Holders and some specific Visa holders in the US, who earn up to USD 75,000 per person. Americans living abroad are also eligible to receive the payment.

For US taxpayers with income above USD 75,000, the payment amount is reduced by USD 5 for each USD 100 above the USD 75,000. Single taxpayers with income above USD 99,000 and couples with combined income over USD 198,000, with no children, are not eligible.

The payment is worth USD 1,200 per adult and USD 500 for each dependent child under 17 years old and to qualify for this relief, the individuals must have a US social security number, and file US taxes.
If you do not usually file a tax return, it will be necessary to file a basic return to be eligible. From the return, the IRS will calculate and send payments to taxpayers who meet the criteria to be eligible for a payment. The IRS will use information from the individual’s 2018 tax return to calculate the amount, if they have not yet received a return for 2019.

Details of a web based portal to streamline system administration between taxpayers and Government is due to be announced in the coming weeks which will allow taxpayers to add and update their details, where necessary, and provide banking information to ensure the payments can be received as quickly as possible. The payment will then be made directly into the same bank account as detailed on the filed tax return.

The IRS has recommended that all US taxpayers file a tax return as soon as possible if they haven’t already done so, although these economic payments will be available throughout 2020.

As a further helpful measure, the normal tax return filing dates and payment dates have been automatically extended to July 15 2020 and so taxpayers do not need to file any additional forms or contact the IRS to qualify for this automatic federal extension. No interest or penalties will be charged as a result of payments delayed until July 15. If taxpayers require additional time to file beyond July 15, then a filing extension can be requested by filing form 4868 in the usual way.