Corona – Benefits for US Citizens (updated)

Mar 28, 2020

From Dust to Transfer

On March 27, 2020 the president signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARE). The unprecedented act funds two trillion dollars of spending in response to the current Covid-19 pandemic and resultant economic hardships. 500 billion dollars of this spending will be distributed directly to American citizens in the coming weeks.Summary of features
of this benefit:

  1. The benefit applies to all US citizens. There is no requirement to reside in the United States.
  2. The amount is $1,200 per person or $2,400 for a married couple plus an additional $500 per child age 16 or younger.
  3. To qualify, the citizen must have at least $2,500 of qualifying income such as wages, self employment, social security, or pensions.
  4. The benefits are reduced for Adjusted Gross Income in excess of $75,000 ($150,000 for a joint return).
  5. The benefits will be based on your 2019 or 2018 tax filing. As long as you have filed your 1040 for one of these tax years, no additional action is required.
  6. Payments will be deposited directly to your US bank account if you received your last refund by direct deposit – probably in the next 30 days. Otherwise, a paper check will be delivered in the next few months.

If you would like to receive your benefit but have not yet filed your 2018 or 2019 tax return, then please contact us today to get started.

 

FAQ

  1. I have not yet filed the 1040 for 2018 or 2019. What is the deadline?
    • Answer - By law, all benefit checks must be cut by the IRS no later than December 31, 2020. Your 2018 or 2019 tax filing must be submitted well ahead of this deadline. The exact date is unknown, but suggested to be no later than September 01, 2020.
  2. If I haven’t filed the 2019 1040 yet and have additional children to claim, how and when will I receive the $500 benefit for these children? 
    • Answer - additional children will need to be reported on the 2019 tax filing well ahead of December 31, 2020.  If the social security numbers are delayed, then they will not qualify.
  3. Do couples with 6013(g) election qualify filing MFJ?
    • Answer -  No, unless both spouses have a social security number (ITIN will kill it).  Mixed couples with SSN + ITIN might consider filing 2019 separately.
  4. If my income met the threshold in 2018 but not in 2019, should I hold off from filing 2019 taxes?
    • Answer - yes, 2019 filing should be delayed if it might cause the client to lose out on the benefit.
  5. Does the AGI threshold include income excluded by form 2555? 
    • Answer - No.  The legisltation looks at “AGI” and not “modified AGI”, so the excluded income is not added back when calculating the taper.
  6. If I excluded ALL of my income via form 2555, do I qualify? - To be determined
  7. I’m a green card holder - do I qualify
    • Answer - yes.  NRA’s do not qualify.  Dependents do not qualify.  Green card holders are not “non resident aliens” but are considered citizens for tax purposes, as long as they have a social security number.

Reference:

https://www.congress.gov/bill/116th-congress/senate-bill/3548/text

Back to blog

JOIN OUR NEWSLETTER

Subscribe to our newsletter to receive the latest tax news and ongoing updates.


Many taxpayers receive identity verification notices from the IRS, and in most cases, the process is straightforward and can be resolved without much difficulty.

You have the following options to verify your identity:

Option 1: Verify through the IRS using your ID.Me account

 

Option 2: Use the IRS Document Upload Tool

    • Please note when they ask for the access code answer "no" and put in the notice/letter type 5447C

    • Alternatively, we can upload the documents on your behalf. (Please note additional fees apply.)

For both options 1 and 2:

    1. Allow at least 30 days to process.
    2. You can then check your status on IRS Where's My Refund or request that we pull your transcript.

    Option 3: Call the IRS

      1. Phone number: 1-267-941-1083

      1. When calling the IRS please note that there could be long wait times. We recommend the best time to call is as close to 1PM Israel time as possible, when the lines first open.

    When speaking with the IRS agent:

      • Let them know you are calling in response to a Letter 5447C letter for tax year 202x.

      • Provide the control number as it appears on the first page of the letter.

      • Be prepared to answer any question they ask from the first 2 pages on both tax returns, including:

          • complete address

          • filing status (Head of Household /Married Filing Separately / Married Filing Joint/ Single)

          • refund amount.

      • If you are unsure of an answer you may ask the agent where it can be found on the return.

      • Know the dates of birth for you and the children on the return

      • Know your mother's maiden name

      • If they ask about W-2 income, tell them since you live outside of the US your income isn’t reported on a W-2, but rather the equivalent form 106 instead.

    They hopefully will not ask any more financial questions.

    If your identity is successfully verified during the call, the IRS will typically inform you immediately. Your refund should then be released within approximately 6-9 weeks.

    Documents Required in All Cases

    Regardless of the verification method you choose, you will need:

      • a copy of the 5447C letter you received

      • the first 2 actual 1040 pages of your 202x and 202x tax returns

    Additional Documents for ID.me or Document Upload Verification

    If you are verifying online through ID.me or using the IRS Document Upload Tool, you will also need:

    Two clear copies of acceptable identification, as listed in the IRS letter (for example passport and license).