April 20, 2020 Question of the Week: Stimulus Payments

April 20, 2020 / updated May 11, 2020

Question: I am an international student and I've gotten a $1,200 payment from the US federal government related to the COVID-19 response. Am I supposed to get this payment? I'm worried that I may have gotten a payment incorrectly.

Answer: First, don't panic! There have been many questions about Economic Impact payments (also sometimes called the CARES stimulus payments or economic stimulus payments) currently being disbursed by the Internal Revenue Service (IRS). These payments were authorized under the CARES stimulus package, which was passed by Congress in response to the economic and financial impact caused by the COVID-19 pandemic. Because these measures have been taken very quickly due to the urgency of the economic crisis, it is well-known that many may have questions about these payments. For more information - including details about payment eligibility and amounts - go to the IRS's Economic Impact Payment Information Center and their Frequently Asked Questions (FAQs) page.

Based on the information provided by the IRS, payments will be made to qualifying US citizens or resident aliens. Nonresidents are not eligible for payments. However, while international students and scholars are usually nonresidents for tax purposes, some may qualify as tax residents because they have been in the US for a long enough period of time to be considered tax residents under the Substantial Presence Test. (Most students in F or J status do not take the Substantial Presence Test for the first five years of physical presence in the US; J-1 scholars may take the Substantial Presence Test if they have been in the US for more than two years.)

If you passed the Substantial Presence Test and filed as a tax resident in 2018 or 2019, you may automatically receive a stimulus payment by check or direct deposit, even if you are no longer in the US. You may also receive an automatic stimulus payment if you accidentally misfiled as a resident for tax purposes when you actually should have filed as a nonresident.

Because the IRS has not provided clear instructions on what to do regarding mistaken or erroneous Economic Impact payments, we recommend that you set the money aside if you believe you received a payment in error. This will help in case the IRS later requests you to return your payment if you were ineligible. Or, you can also follow these instructions for returning an incorrect payment to the IRS.

Unfortunately, the International Center is unable to advise on individual cases regarding tax residency or the Economic Impact payment. We recommend that you consult with a tax specialist in the event you have any questions about your specific question.

[UPDATE: May 11, 2020]

The Internal Revenue Service has issued new FAQ’s on the Covid-19 CARES stimulus payment, including the following information:

Q. Does someone who is a resident alien qualify for the payment? (Added May 6,2020)

A person who is a non-resident alien in 2020 is not eligible for the Payment. A person who is a qualifying resident alien with a valid SSN is eligible for the Payment only if he or she is a qualifying resident alien in 2020 and could not be claimed as a dependent of another taxpayer for 2020. Aliens who received a Payment but are not qualifying resident aliens for 2020 should return the Payment to the IRS.

Q. What should I do to return an Economic Impact Payment (EIP)? (Added May 6, 2020)

You should return the payment as described below.

If the payment was a paper check:

1. Write "Void" in the endorsement section on the back of the check.
2. Mail the voided Treasury check immediately to the appropriate IRS location listed below.
3. Don't staple, bend, or paper clip the check.
4. Include a note stating the reason for returning the check.

If the payment was a paper check and you have cashed it, or if the payment was a direct deposit:

1. Submit a personal check, money order, etc., immediately to the appropriate IRS location listed below.
2. Write on the check/money order made payable to “U.S. Treasury” and write 2020EIP, and the taxpayer identification number (social security number, or individual taxpayer identification number) of the recipient of the check.
3. Include a brief explanation of the reason for returning the EIP.

For more information and further instructions, go to the IRS FAQ web site.