What the Coronavirus Stimulus Package Means for Legal and Illegal Immigrants

The Coronavirus Aid, Relief and Economic Security Act (CARES) — a $2 trillion stimulus package to provide financial relief to individuals, families, and businesses — was signed into law. The 2020 coronavirus stimulus delivers relief through a range of measures, including an advanced tax rebate to taxpayers.

  • If you are a Legal Immigrant, and hold a Social Security Number, this is what you need to know.

Stimulus Checks for Individuals and Joint Taxpayers

Stimulus checks — up to $1,200 for individuals, $2,400 for joint taxpayers and an additional $500 for each qualifying child under 17 — will be based on information from your most recent tax filings, either 2019 or 2018 if you have not yet filed this season.

According to the IRS, approximately 80% of Americans will be eligible to receive full or partial stimulus payments through the CARES Act.

If you have an adjusted gross income (AGI) of up to $75,000 ($150,000 married filing jointly), you should be eligible for the full amount of the recovery rebate.

Note, Adjusted Gross Income (AGI) is your gross income like wages, salaries, or interest minus adjustments for eligible deductions like student loan interest or your IRA deduction. Your AGI can be found on line 8b of your 2019 Form 1040.

As your AGI increases over $75,000 ($150,000 married filing jointly), the stimulus amount you get will go down. The stimulus check rebate completely phases out at $99,000 for single taxpayers, $136,500 for those filing as Head of Household and $198,000 for joint filers with no kids.

The stimulus check is being paid this year based on information from your most recent tax return and will be reconciled in tax year 2020 to ensure you received the correct rebate amount.  If you are underpaid based on your 2020 income you may receive more credit. If you are overpaid, you do not have to pay it back.

For those that aren’t required to file a tax return, or haven’t done so, TurboTax launched a Stimulus Registration Product to help you submit all the necessary information to the IRS so that you can quickly and easily get your money.

Student Loan Payment Relief 

Under the CARES Act, employers can still make student loan payments on behalf of their employees on a tax-free basis, up to $5,250 annually. This means the loan payments would be excluded from the employee’s income. The provision is applicable on loan payments an employer makes from the day the bill was signed into law (March 27, 2020) through Jan. 1, 2021.

Increase in Unemployment Payments 

Unemployment payments will be increased by $600 weekly for four months through July 31, and the bill also includes those who were previously not eligible for unemployment, including part-time employees, freelancers, independent contractors, gig workers, and the self-employed.

Financial Assistance Provided for Eligible Non-profits and Self-Employed Individuals  

The Small Business Administration’s loan program is now accessible to more businesses and has an increased cap on loans. This Act provides $349 billion for the Small Business Administration to distribute through a new loan program titled the Paycheck Protection Program (PPP), making non-profits, self-employed individuals, and contractors eligible to receive assistance.

The Federal Reserve lending program will also receive $454 billion in support — loans from this fund will be for no longer than 5 years and will be aimed at aiding nonprofits and businesses with around 500-10,000 employees with the goal of retaining at least 90% of their workforce with full compensation and benefits.

Penalty Waived for Early Retirement Withdrawal

If you need to take money out of your retirement plan ASAP, keep in mind that the 10 percent early withdrawal penalty may be waived on up to $100K of retirement funds withdrawn if you are a qualified individual impacted by Coronavirus.  You are a qualified individual if:

  • You, your spouse, or dependent are diagnosed with Coronavirus
  • You experience adverse financial consequences as a result of being quarantined, furloughed, or laid off
  • You had hours reduced due to Coronavirus
  • You are unable to work due to your childcare closing or reducing hours
Additionally, income attributable to such distributions would be subject to tax over three years, and you may recontribute the funds to an eligible retirement plan within three years without regard to that year’s cap on contributions.

Delay of Social Security Payroll Tax Payment for Employers

Employers, including the self-employed, can delay the payment of the employer portion of the Social Security payroll tax for the remainder of the year and pay back the liability over the next two years.

These are the most frequent questions asked:

  1. How much stimulus money will I get?
If you’re wondering how much money you may qualify for under this relief package, TurboTax can help — just fill out the simple fields in our stimulus calculator here to see your estimated amount.

Eligible taxpayers will receive up to $1,200 for individuals, $2,400 for joint taxpayers and an additional $500 for each qualifying child under 17.

If you have an adjusted gross income (AGI) of up to $75,000, $112,500 Head of Household, $150,000 married filing jointly, you should be eligible for the full amount of the recovery rebate. The stimulus check rebate completely phases out at $99,000 for single taxpayers, $136,500 for those filing as Head of Household and $198,000 for joint filers with no kids. Your eligibility will be based on information from your most recent tax filings.

  1. When will I get my stimulus check? How long will it take to get my stimulus check?
The IRS began sending stimulus payments, with the first payments hitting customer accounts on April 15. To find out when your stimulus check is coming, visit the IRS Get My Payment tool.
  1. Can I get my stimulus check if I have not filed my 2019 taxes?
Stimulus checks will be based on information from your most recent tax filings, either tax year 2019 or 2018 (if you have not yet filed this season). If you have not filed your 2019, the IRS will use information from your 2018 tax return.
  1. I have already filed my 2019 taxes — do I need to do anything else to receive my stimulus checks?
If you have filed your 2019 taxes, you do not need to take any further action to receive your stimulus check.
  1. How will I get my stimulus check? Can the IRS send the stimulus payment to me via direct deposit?
The IRS will be using the information from your most recent tax return to send you your stimulus check.
  1. I filed a tax return in 2018 and/or 2019 but did not provide my direct deposit information. Can I still get a stimulus check if the IRS does not currently have my direct deposit information?
The IRS will not have your direct deposit information if you did not provide it on your 2018 or 2019 tax returns. This could happen if you had a balance due for 2018 and 2019 or if you requested your refund by check for those years.

The IRS launched Get My Payment tool in mid-April. The tool will let you check your payment status, confirm your payment type (direct deposit or check) and enter direct deposit information.
  1. Can I still get a stimulus check if I don’t need to file a tax return because I don’t have income from wages or make enough money? How will I get my stimulus payment?

You may not need to file a tax return because you earn income below the IRS filing threshold and are not required to file federal income taxes.

If you are not required to file a tax return, do not worry — you are still eligible to receive a stimulus payment.

For those that aren’t required to file a tax return, as stated above, TurboTax launched a Stimulus Registration Product to help you submit all the necessary information to the IRS so that you can quickly and easily get your money.
  1. Can I still get a stimulus check if I only have Social Security Retirement, Disability Income (SSDI), or Railroad Retirement benefits and do not file a tax return? What do I need to do next?

If you receive Social Security retirement, disability income (SSDI), or Railroad Retirement benefits and are not typically required to file a tax return, you do not need to take any action — you will receive your stimulus payment directly in your bank account.

The IRS will use the information from your Form SSA-1099 or Form RRB-1099 to generate your stimulus payment if you did not file tax returns in 2018 or 2019. Keep in mind that you will receive your stimulus payment as a direct deposit or by paper check, depending on how you normally receive your Social Security income.

  1. Can I get a stimulus check if I only get Supplemental Security Income (SSI) and do not file a tax return?  What do I need to do next?

If you receive Supplemental Security Income (SSI), you will automatically receive a stimulus payment with no further action needed. The IRS projects the payments for SSI recipients will go out no later than early May. The Treasury Department, not the Social Security Administration, will make these automatic payments to SSI recipients. You will generally receive the automatic payments by direct deposit, Direct Express debit card, or by paper check, just as you would normally receive their SSI benefits.

Can I get a stimulus check if I only get Veteran Affairs benefits and do not file a tax return?  What do I need to do next?

Veterans and their beneficiaries who receive Compensation and Pension (C&P) benefit payments from VA who don’t usually file a tax return and didn’t  file their tax year 2018 or tax year 2019 taxes also don’t need to do anything and will automatically receive their $1,200 stimulus check.

*Note, if you receive Social Security retirement or disability benefits (SSDI), Railroad Retirement benefits, SSI or Veteran Affairs benefits you will automatically receive a stimulus check and you don’t need to do anything, however if you have qualifying dependent children you will need to get that information to the IRS as soon as possible.

Some beneficiaries in this group have a limited window to register to have $500 per eligible child added automatically to their soon-to-be-received $1,200 Economic Impact Payment. The IRS April 20 alert suggests registering information for your dependent using the IRS  special non-filer tool  by noon Eastern time, Wednesday, April 22, so that you get all of your eligible stimulus payment in one payment.

You can also register your dependent’s information using TurboTax free Stimulus Registration Product.  Otherwise, your payment at this time will be $1,200 and, by law, the additional $500 per eligible child amount would be paid in association with your return filing for tax year 2020.

The first window affects Social Security Income and Railroad Retirement Benefit recipients with children. SSI and VA recipients have slightly more time to provide the IRS with dependent child information to add $500 to automatic payments.  The IRS does, however, encourage SSI and VA recipients to also register their dependent information as soon as possible.  Once your $1,200 payment is issued you will not be eligible to add information about your dependent child/children and you will have to file a 2020 tax return to receive the additional $500 per dependent child.

  1. If I just lost my job, but do not qualify for a stimulus check based on 2018 or 2019 income.  What does that mean for me?

If your 2018 and 2019 income was above the threshold, a stimulus check will not be automatically deposited into your bank account in the next couple weeks, but you might see it in the form of a tax credit when you file your 2020 tax return in 2021, as the credit is for tax year 2020.
  1. Does the stimulus payment impact my eligibility for other assistance programs?
The stimulus payments are not considered taxable income and will not affect eligibility for other government programs and benefits. Additionally, the bill temporarily suspends some of the requirements to use tax refund money to repay debts, including money owed to the IRS.
  1. I am claimed as a dependent on my parents’ tax return, but I also work and file a tax return. Will I receive a stimulus check?
Under the CARES Act, if you are claimed as a dependent on someone else’s return you cannot receive a stimulus check.  If you were claimed as a dependent for 2019, but not 2020 you will most likely not receive a stimulus check. You may, however, be able to get a tax credit for it when you file your 2020 taxes in 2021.
  1. I owe (a previous tax debt/student loan debt) can I still receive a stimulus check?
Yes, the CAREs Act waives any previous outstanding tax debt or student loans when issuing stimulus checks. The only debt that is not waived is unpaid child support payments.
  1. I support my mother/father and claim them as a dependent, but they get social security income. Can they still receive a stimulus check?
Although your parents received social security income, they cannot receive a stimulus check if they are claimed as dependents. Under the CAREs Act, dependents are not eligible for a stimulus check.

  • If you are an Illegal Immigrant or are married to one, this is what you need to know.

Undocumented immigrants are ineligible for federal payments to help families during the coronavirus pandemic. So are their spouses, even if they are U.S. citizens.

Married to an Undocumented Immigrant?

You May Not Get a Stimulus Check. A provision in the legislation that created the stimulus fund, which received little attention while it was under debate, prohibits payments to people who file taxes jointly with someone who uses an Individual Taxpayer Identification Number, a common substitute for a Social Security number used mostly by immigrants without legal status.

The result, immigrant advocates say, is that many American citizens who are married to undocumented immigrants will not receive financial support at a time when the country is facing a staggering unemployment crisis.

Those families also must forgo the bonus payments that otherwise would be distributed based on the number of children living in their home. As a result, larger households in financial distress may lose out on thousands of federal dollars because of a single undocumented family member.

An estimated 1.2 million American citizens are married to undocumented immigrants. Michael Zona, a spokesman for Senator Chuck Grassley, a Republican who as chairman of the Senate Finance Committee helped craft the bill, noted that American citizens who file separately from their undocumented spouses may still be eligible for the credit.

Most mixed-status couples file jointly because doing so is an important part of proving the legitimacy of their marriage, which is necessary for the undocumented spouse to eventually gain legal status.

For many families, the exclusion is particularly painful because it applies only to those undocumented immigrants who pay federal income and Social Security taxes.

Americans who are married to immigrants who are paid under the table but do not report their earnings to the federal government are not disqualified from receiving stimulus checks.

At least three federal lawsuits seeking a nationwide injunction blocking the restrictions on stimulus payments were filed last week, in Illinois and New York and Maryland. The cases argue that denying the funds to U.S. citizens because their spouses lack Social Security numbers violates the constitutional rights to free association, due process and equal protection inherent in the Constitution.

An exception to the rule was made for couples where either spouse served in the military during the previous tax year.

Advocacy groups have begun to introduce programs meant to catch immigrant families that are slipping through the financial safety net that is being hastily sewn by Congress.

Do you live in California?

California is giving its own stimulus checks to undocumented immigrants. If you live in California,  you’ll be eligible for cash payments from a $125 million coronavirus disaster relief fund.

The one-time benefit will provide $500 of support per adult, with a cap of $1,000 per household, Newsom’s office said. The fund combines $75 million in state donations with $50 million from private philanthropists.

It’s the first state funding effort aimed at helping undocumented immigrants

as the coronavirus pandemic paralyzes much of the country and spurs soaring unemployment. And immigrant rights groups hope it will not be the last.

Will undocumented immigrants get any stimulus checks or relief?

A bill introduced in the House of Representatives would allow undocumented immigrants to receive stimulus checks as part of the CARES Act.

The legislation has nearly 50 co-sponsors, including Democratic Reps. Alexandria Ocasio-Cortez of New York, Ilhan Omar of Minnesota and Ruben Gallego of Arizona. The House, which is controlled by Democrats, has not passed the bill.

The bill would amend the qualifications necessary to receive federal support provided by the CARES Act.

The CARES Act requires recipients of benefits to provide a valid Social Security number, which undocumented immigrants don’t have and can’t legally get.

The Leave No Taxpayer Behind Act would amend the CARES Act by adding an Individual Taxpayer Identification Number as an acceptable credential to receive government benefits.

An ITIN is a number assigned by the Internal Revenue Service to make sure people who are not permitted to receive a Social Security number pay taxes regardless of their immigration status.

The Leave No Taxpayer Behind Act would expand access to the CARES Act federal relief to individuals who have an ITIN, benefiting the many undocumented immigrants in that situation, not all undocumented immigrants have ITINs.

If passed, the bill would aid only undocumented immigrants who have ITINs and pay taxes.

A substantial number of undocumented immigrants do not work or work at untaxed “under the table” jobs. That portion of the undocumented immigrant population would not be eligible for relief under the legislation.

Source: https://blog.turbotax.intuit.com/, https://www.cnn.com/2020/04/16/us/california-stimulus-undocumented-immigrants/index.html https://www.washingtonpost.com/local/legal-issues/us-citizen-children-with-undocumented-parents-unfairly-denied-coronavirus-relief-federal-lawsuit-asserts/2020/05/05/1da19662-8ed2-11ea-a0bc-4e9ad4866d21_story.html https://www.usatoday.com/story/news/factcheck/2020/04/23/fact-check-stimulus-checks-bill-aids-some-undocumented-immigrants-itin/3005695001/

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