Incentive Update: Why Some Americans Living Abroad Got Payments – Community News
Stimulus Check

Incentive Update: Why Some Americans Living Abroad Got Payments

The Internal Revenue Service (IRS) has made more than 3.7 million payments totaling $5.5 billion to individuals living outside the United States, according to agency figures reported by CNBC this week.

The figures include the three rounds of incentive payments distributed through June 3, 2021. The figures also include US citizens living abroad, military personnel stationed abroad, and residents of US territories such as the US Virgin Islands and Puerto Rico.

Congress approved three rounds of stimulus checks during the coronavirus pandemic: March 2020 (up to $1,200 per person), December 2020 ($600) and March 2021 ($1,400). The stimulus measures were designed to help Americans who had found themselves in financial trouble due to the COVID-19 pandemic.

Ultimately, U.S. citizens living abroad, like any other U.S. citizen, must pay taxes on their worldwide income, according to the IRS.

While some citizens living abroad receive tax breaks on their income, most who pay taxes to the US are eligible for economic stimulus checks, just like any other citizen living in the 50 states or Washington DC

Americans living abroad are also eligible for additional incentive money in the form of the Enhanced Child Tax Credit, provided they or their spouse has had a home in the 50 states or DC for at least six months.

The IRS also incorrectly sent incentive payments to non-citizens.

According to a Treasury Inspector General for Tax Administration report obtained by CNBC, more than 30,000 checks worth $1,200 each — $37 million in all — were falsely paid to non-residents living abroad.

According to the report, the federal government has also made other payment errors, such as providing multiple incentive payments to people living in U.S. territories and keeping deceased incentive recipients on payroll.

But overall, the IRS correctly paid 98% of first-round payments, the report said.

Ultimately, as CNBC noted in its story, the amount of overseas payments is relatively small compared to the total: Only 0.7% of the $803 billion in payments went to Americans living abroad (0.8% of the 472 million payments sent).

“The amount of payments going abroad is less than 1% of the (total),” Kyle Pomerleau, a senior fellow at the American Enterprise Institute, told CNBC. “If you look at it, it wasn’t really much.”

Related stories about the stimulus:

Incentive Update: Here’s Who Gets a Payment in 2022

Do Social Security recipients get a 4th stimulus check?

$1,000 bonus checks are sent to some people; here’s who gets them

Incentive Update: These States Are Giving Extra Relief Money to Residents

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