US government stimulus check

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Ron.Henderson
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US government stimulus check

Post by Ron.Henderson » Sat Mar 28, 2020 10:41 am

Though the details are not final, it appears that the $1200 "stimulus check" will be issued to anyone filing with an SSN (not an ITIN) who's Adjusted Gross Income is under $75k. Since the AGI is the number that results after the FEIE is deducted, this means that anyone filing from Canada earning up to US$180k would receive the check.

For dual citizens in Canada who have not been compliant - the vast majority - but who have an SSN, this might be a fun time to file a simple 1040 showing income below the FEIE. It can be done with a PO box or mail forwarding service if you are concerned about using a real street address. If nothing else it's a 50 percent rebate on the $2350 renunciation fee.

Ron.Henderson
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Re: US government stimulus check

Post by Ron.Henderson » Sat Apr 04, 2020 7:42 pm

Question about this: I've seen reports that the $1200 isn't a straight giveaway, but some sort of credit against 2020 taxes. So what happens if a non-resident US person files for 2019 to receive the money but then either:

(1) has $0 taxable income (or AGI) in 2020 because they use the FEIE?

(2) doesn't file in 2020 because they are intentionally non-compliant and only filed in 2019 to collect the stimulus payment?

nelsona
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Re: US government stimulus check

Post by nelsona » Sun Apr 05, 2020 7:42 am

In past stimulus check schemes, the amount was a indeed treated as a "payment" against that year's taxes (in order to account for those that might not have received the check for whatever reason), so it was not required to be repaid if the taxpayer owed less than the check value. So if you get the check, you are fine. If not, you may need to file in 2020 to get it. See the 2009 1040 and Schedule M.

Since it is in the form of a "payment" rather that a tax credit, those living in Canada, for example, may see the full benefit since it is technically NOT reduction if foreign tax, and should nt lower the foreign tax credit.
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Ron.Henderson
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Re: US government stimulus check

Post by Ron.Henderson » Sun Apr 05, 2020 10:30 am

Follow up question: does the IRS make direct deposits to Canadian bank accounts?

nelsona
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Re: US government stimulus check

Post by nelsona » Sun Apr 05, 2020 1:05 pm

IRS does not direct deposit to foreign banks.

If a taxpayer does not have US bank on record for direct deposit (ie. hasn't had a refund in past few years) the IRS will mail the check to the address they have on record.
If one has moved recently, and this move has not been reflected on their 2109 return, they may wish to send a change of address immediately and hope that it catches IRS before they send a check.
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Ron.Henderson
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Re: US government stimulus check

Post by Ron.Henderson » Sun Apr 05, 2020 2:21 pm

Thanks. Is there a simple, recommended way for a non-resident to get a US bank account, online?

Bubba Gums
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Re: US government stimulus check

Post by Bubba Gums » Sun Apr 05, 2020 2:46 pm

(1) Foreign EARNED INCOME Exclusion. You are not eligible.

(2) "intentionally non-compliant" Hmm I am sure that ends well. "Under penalties of perjury, I declare that..."

CdnAmerican
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Re: US government stimulus check

Post by CdnAmerican » Sun Apr 05, 2020 2:57 pm

Hi Ron - To get a US account online, it's actually pretty easy. RBC does it with their bank which is based in Georgia (the state, not the country). TD has one as well, I believe, and they probably both work finr. The key is to have an account in US dollars which is based in the US; some banks in Canada offer US$ accounts which are based in Canada, and those won't help in this instance. Good luck!
Not a professional opinion.

Ron.Henderson
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Re: US government stimulus check

Post by Ron.Henderson » Sun Apr 05, 2020 4:09 pm

@CdnAmerican

Thanks, that's useful. Since direct deposit is going to be faster than mail, I want to set up a "burner" account to use for the stimulus money, which I can then close after it's all paid out.

@Bubba Gums

(1) If you declare any sort of Canadian salary, that's foreign earned income. As long as the number is under US$180k the AGI will be under $75k after deducting the FEIE and you will be fully eligible for the stimulus check, apparently. Just now waiting to see if the new "simplified return" the IRS is proposing will work for non-residents, or whether you will still need to file the 1040 + 2555 forms.

(2) By "intentionally non-compliant" I simply mean aware of the US tax obligations but choosing to ignore them and never file returns; a Canadian dual citizen with no US financial ties is fully protected from the IRS (thanks to the tax treaty) and if they don't disclose US person status to their banks, there's no FATCA reporting either. Compliance rates from Canada are well under 10 percent, so this is very common, and carries no risk. I'm only asking about the stimulus cheque (and I don't think they're going to stop at just one) because I think it may be worth filing once for 2019 to claim the money, then use it to offset the criminally extortionate US$2350 fee the US government charges to renounce citizenship, which I otherwise refuse to pay.

MaggieA
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Re: US government stimulus check

Post by MaggieA » Sun Apr 05, 2020 6:24 pm

Are Canadian/US dual citizens not required to disclose US person status to their Canadian banks? And file FBARs (unless so poor they don't meet the $10K USD asset threshold). @Ron.Henderson your remarks seem very blithe about flouting US laws, also Canadian laws or regulations.

I suppose for "accidental" US citizens who genuinely have no US financial ties this may work well enough. My family has US pension and social security income, so I don't feel able to shuck the responsibility to file 1040, although I surely would like to.

Ron.Henderson
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Re: US government stimulus check

Post by Ron.Henderson » Sun Apr 05, 2020 8:15 pm

Canadian banks will ask about US person status but they don't validate the answer, so you just check "no" on the form and that's it. If born in the US, use a drivers license not a passport as ID when opening a new account. Banks don't seem to take FATCA very seriously.

For "Accidental Americans" or dual citizens without US financial ties it's much better to ignore US law and not file FBARs or tax returns. The IRS can't do a thing about it. There are no issues visiting the US or getting a US passport if needed. As I said, compliance rates in Canada are well below 10 percent.

nelsona
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Re: US government stimulus check

Post by nelsona » Sun Apr 05, 2020 8:34 pm

Remember that to get direct deposit with IRS, you need to have generated a REFUND on a recent return, otherwise there is no direct deposit. So simply filing a return with no refund will only get you a check, not a direct deposit.
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Ron.Henderson
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Re: US government stimulus check

Post by Ron.Henderson » Sun Apr 05, 2020 9:45 pm

I read somewhere that they are setting up an online form to enter bank details, to reduce the number of checks they need to send out.

nelsona
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Re: US government stimulus check

Post by nelsona » Mon Apr 06, 2020 11:16 am

I'm quite sure you will need to have a return filed to bounce the security questions they would ask. Otherwise, give me your SSN number and I will have them send me a check to my bank. Right?
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

nelsona
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Re: US government stimulus check

Post by nelsona » Mon Apr 06, 2020 11:17 am

For someone who preaches under-reporting and non-compliance, you sure are excited to go through the hoops to get $1200.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

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