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Second Stimulus Checks for US Expats: What We Know

Expat Tax Blog | Tax Tips for US Americans Abroad

2021 Stimulus Checks for Expats: What We Know

As the pandemic continues, the majority of stimulus payments have already been used by Americans worldwide. Yet, news about a second check is emerging. Will it be the same amount as last time? How will dependents be affected? This is what we know so far about a second stimulus check for US expats…

Second Stimulus Checks for US Expats

US congressional leaders agreed to a new $900 billion coronavirus rescue package that includes a second wave of stimulus checks. The vote for the bill is expected to happen today – Monday, 21, 2020.

The second stimulus payment amount will be $600 per qualifying taxpayer. This is half of the $1200 check approximately every American received this year.

Then, each qualifying dependent (ie: child under 17 with a US Social Security number*) will get $600, which will be added onto the taxpayer’s check.

*The IRS has yet to confirm:

  • If the age limit will be removed for qualifying dependents for the second stimulus check
  • Whether the same income thresholds and gross adjusted threshold to be eligible for the check will be the same as last time

Stay tuned as we will update this page on a regular basis!

When Can Expats Receive the Second Stimulus Check?

The second stimulus check can only come shortly after New Years:

  • If the United States Congress passes the new coronavirus rescue package before Christmas
  • …and President Donald Trump signs off on it

Treasury Secretary Steve Mnuchin said in August that payments could then be sent out the first week after the new aid bill is signed.

We hope that US expats will receive their second check in a timely manner. We found through our customer survey in May that:

  • 57% expats received a stimulus payment two weeks or more after filing their 2019 tax return

Most surprising, the majority of survey takers stated it took at least four weeks or longer to receive the check.

How Expats Get the Second Check

How will Americans on land and abroad get the second stimulus check? It depends on how they got the first one.

If you received your first stimulus check:

By Direct Deposit: The second check should arrive the same way with no further required action on your side.

By paper mail: The IRS may reopen the Get My Payment Tool so you can add in your US bank account details for a direct deposit. Don’t have a US bank account as an American expat? Try to get one using an online bank service such as Transferwise. Please note, while Transferwise did work for a majority of Stimulus Payments in 2020, in some instances, it did reject some IRS payments due to fraud protection measures.

If you need to catch up on your taxes as an American living abroad to receive the first and second stimulus payments, you can utilize our Streamlined Procedure expat tax software.

Qualifying for Stimulus Checks

If you didn’t qualify for the first Stimulus check this year, you might be able to as an expat for 2021. The value of stimulus checks was from calculating previous years’ tax returns. From this, some US citizens weren’t eligible to receive the check. 

However, for American citizens living abroad, previous tax returns can be re-evaluated for the coming year. This is based on your 2020 income. Yet, only if you claimed the Foreign Earned Income Exclusion to reduce the adjusted gross income, or earned less income in 2020.

Look to file a 2020 tax return in January with us! Sign up on our waitlist to back claim the stimulus checks.

Recovery Rebate Credit

As a US expat who will file 2020 taxes with Form 1040 or Form 1040-SR, you may also be eligible for the Recovery Rebate Credit.

The Recovery Rebate Credit is authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Any eligible individual who did not receive the full amount of the recovery rebate as an advance payment, also known as an Economic Impact Payment, can claim the Recovery Rebate Credit on a 2020 Form 1040 or Form 1040-SR.

Generally, this credit will increase the amount of your tax refund or lower the amount of the tax you owe.

IRS

These forms can be used by people who are not normally required to file tax returns but are eligible for the credit.

The Heroes Act Proposal

For some background, The House of Representatives passed the Health and Economic Recovery Omnibus Emergency Solutions – or HEROES Act – in May. This is a second relief package after the Coronavirus Aid, Relief and Economic Security (CARES) Act.

The HEROES Act includes special provisions for eligible Americans and expats to receive a second stimulus payment. It proposes a $1200 check, with gross adjusted income under $75,000, reported on their 2018/2019 tax return. Then, for married individuals filing jointly, the payment is doubled. 

As a note, adjusted gross income for an American abroad comes after you apply the FEIE on your tax return. 

Additionally, the HEROES act includes providing the stimulus payment getting reduced for every $100 of adjusted gross income that exceeds the threshold. As a US citizen abroad, you can still be eligible for the payment if you file jointly with a foreign spouse and that spouse doesn’t have a SSN.  

US Expats, Stimulus Checks & Taxes

Need to catch up on your 2018/2019 US taxes to receive the first and second stimulus payments? Please sign up for our waitlist to file expat taxes in 2021. We will then be able to show you how you can become tax compliant in no time!

Stay tuned via our blog as we release updates of the newest Stimulus payment news!


This post gets updated and enhanced frequently.
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