Get to know the authorThe IRS has launched two new online tools for expats to provide their US bank details so that they can receive their stimulus check by direct deposit rather than by mail.
It’s imperative that expats understand which tool is the right one for them based on their situation – and many expats shouldn’t use either.
The tools are called Get My Payments, and Non-Filers: Enter Payment Info Here.
Background – CARES Act Stimulus Payments
Stimulus payments for expats were among the measures designed to provide financial support to Americans affected by the Coronavirus outbreak contained in the recent CARES Act.
Stimulus payments weren’t originally going to be extended to Americans living abroad, so expats’ inclusion in the final law was a welcome surprise.
The payments are being made to expats whose adjusted gross income on their most recently filed tax return (i.e. for either 2018 or 2019) was below $99,000 ($198,000 for married expats who file jointly with their spouse).
The full payment of $1,200 ($2,400 for married couples filing jointly) is being made to those who earn up to $75,000 ($150,000 for married couples). Above these thresholds the amount paid is reduced by $5 for every additional $100 of adjusted gross income. A further $500 is paid per dependent child with a US social security number under the age of 17 .
“Reports are coming in about taxpayers unable to get their payment status through the IRS Get My Payments tool. Many people are running into the “Payment Status Not Available” error.” – Forbes
To qualify, expats must have a US social security number, and must have filed either 2018 or 2019 taxes (2019 returns aren’t due until July 15th this year).
Stimulus payments are also being made to expats who earn less than the minimum filing thresholds. US filing thresholds apply to worldwide income, and are $12,000 in 2018, $12,200 in 2019, $400 of self-employment income in both years, or just $5 of any income for expats who are married but file separately to their spouse in either year.
How should expats provide their bank details?
The stimulus payments are paid automatically. They will be paid by direct deposit into a US bank account if the IRS has expats’ bank details, or otherwise the IRS will mail a check. Most expats will prefer to receive payment by direct deposit. Expats who haven’t already provided US bank details on either their 2018 or 2019 tax return can provide them in one of three ways – and it’s important that they choose the correct way –
1 – Expats who have filed a 2018 or 2019 tax return but did not provide their bank details can use the new Get My Payment IRS online tool to provide them. This tool also lets expats know when their payment was made or will be made, although it appears to be having teething problems in its first few days.
2 – Expats whose worldwide income was below the minimum US filing thresholds in 2018 and 2019 can use the new IRS Non-Filers – Enter Payment Info Here online tool.
3 – Expats who should have filed in 2018 but didn’t should definitely not use either of the new IRS tools to provide their US bank details, as this would alert the IRS to their non-compliance, which may open them up to IRS penalties and back taxes. Neither should expats who should have filed in previous years but didn’t just file a 2019 return to get a stimulus payment, for the same reason.
Instead, these expats should seek advice from a US expat tax specialist regarding how best to become compliant (often through an IRS amnesty program such as the Streamlined Procedure), then provide their bank details as part of this process.
Most often, expats who become compliant in the correct manner based on their circumstances won’t face back taxes or penalties, and they will still qualify to receive the stimulus payment (assuming they meet the above criteria).
