Last Chance for Americans Abroad to Get Caught Up with the IRS and Claim a Stimulus Payment

If you’re an American living overseas and you haven’t been filing US taxes, now’s the time to get caught up. The IRS has an amnesty program designed for expats who’ve fallen behind called the Streamlined Filing Compliance Procedures, and it lets you get back on track without facing penalties. This year, though, there’s an additional incentive – a possible payout.

If you qualify and you filed your 2021 tax return by June 15th, 2025, you could still receive the 2021 stimulus payment – and possibly thousands of dollars in refundable tax credits. But you have to start the process now. Wait until after June 15th and you could miss out.

Here’s what you need to know – and why waiting any longer could cost you.

What is the Streamlined Procedure?

The IRS knows that many Americans abroad don’t realize they need to file US taxes, so they created an amnesty program called the Streamlined Procedure. If you’re behind, you can catch up by filing:

• The last three years of tax returns
• The last six years of FBARs (if you had foreign bank accounts)
• A statement explaining that your non-compliance was unintentional, due to ignorance of the rules.
  

That’s it. No penalties, just a clean slate.

And right now, there’s a bonus: 2021 is still within reach, and it was the final year of Covid-19 stimulus payments.

Why 2021 Matters: Stimulus and Refunds

In 2021, the US government issued a third round of Economic Impact Payments (aka stimulus checks). Most Americans get $1,400 per person (and $1,400 for each dependent, too).

You can still claim this payment if you never received it—but only if you file a 2021 tax return. And because the Streamlined program requires you to file your last three missed returns, 2021 is part of the deal.

But here’s the catch: Refunds are only honored up to three years after the original due date of that return. The 2021 tax return was due on June 15th, 2022 for US expats. Therefore, that’s the final cutoff date that your 2021 return should be postmarked when filed. 

That means you could be leaving thousands on the table.

To qualify, you need to have adjusted gross income (AGI) of less than $75,000. More good news though: expats can claim a tax break called the Foreign Earned Income Exclusion on up to $108,700 of earned income in 2021 that reduces their AGI to zero.

Will I Owe US Taxes?

Most expats don’t. That’s because of two IRS tax breaks for expats:

1. Foreign Earned Income Exclusion (FEIE) – lets you exclude up to around $126,500 (for 2024) of foreign earned income from US tax
2. Foreign Tax Credit – gives you US tax credits based on the value of foreign taxes you’ve paid

If you live and work in another country, claiming one of these provisions when you file normally means you don’t pay any US taxes – but you still have to file.

And with the 2021 stimulus and Child Tax Credit still on the table, it’s not just about getting compliant, you stand to receive valuable payments, too.

What About the Child Tax Credit?

If you have US citizen kids living with you abroad, there’s even more money available to you.

The Child Tax Credit in 2021 was expanded to up to $3,600 per child depending on where you lived for the majority of the year – and it is refundable. That means you don’t need to owe tax to benefit from the credit, you just need to file the return and you will receive it as a payment.

Here’s what’s required:

• Your child must be a US citizen
• They must have a Social Security number
• They must have lived with you for more than half the year
• Your income must fall below certain limits (which most expats meet)

That’s potentially thousands more dollars back in your pocket for every year you file for, even if you don’t owe anything to the IRS.

Why You Need to Act Before June 15th

The IRS requires your Streamlined submission to include the last three years of missed returns. That means 2021, 2022, and 2023 right now.

But the 2021 return can only include a stimulus payment request if it’s filed before the statute of limitations closes. That cutoff is based on filing deadlines. For Americans abroad, you automatically get until June 15th each year to file. As June 15th is a Sunday and the returns needs to be paper mailed, it’s important to act quickly to ensure there is enough time to prepare, review and post the returns. 

How To Get Started

Here’s what you should do today:

1. Gather your financial info from 2021, 2022, and 2023
2. Work with a tax professional who is familiar working with expats and experienced with the Streamlined program
3. Get a 2024 extension (Form 4868) by June 15th for your 2024 return 

We can help – go to https://www.myexpattaxes.com/free-expat-tax-extension/. 

Don’t Put it Off Any Longer

The IRS offers a way to get caught up on missed US tax filings without facing penalties for Americans abroad who didn’t know or understand the rules. But if you’re behind, you need to take this seriously, and if you move quickly, you stand to receive up to thousands of dollars, too.

The Streamlined program is a great opportunity to get compliant, with no penalties or IRS letters. Peace of mind, and in many cases, a payout too.

But the 2021 stimulus payment is only available for a few more weeks, so act quickly. 

Find out more about Streamlining and get started here: www.myexpattaxes.com/streamlining/Filing extensions for 2024 tax returns is free and easy to do here: https://www.myexpattaxes.com/free-expat-tax-extension/ today.