Understanding each form is key to avoiding a problem with the IRS or the Financial Crimes Enforcement Network (FinCEN), so below we’ll dive into the FBAR and FATCA Form 8938 filing requirements for Americans abroad. If you’re still unsure which tax documents you need to file or if you haven’t filed taxes in a few years, it’s always best to trust these forms to an experienced advisor.

Need to file FinCEN Form 114 or FACTA Form 8938? Whether you want to file your expat taxes yourself with our online DIY expat tax service designed specifically for U.S. citizens abroad or file with an advisor, H&R Block is here to help.

FBAR vs. FATCA: Do you file FinCEN Form 114, Form 8938, or both? What’s the difference?

A common question Americans with assets in foreign bank accounts ask us is if they need to file an FBAR (the actual form you’d file is FinCEN Form 114) or FATCA Form 8938. The answer is: You could have to file one, none, or both. While they both exist to report financial assets to the government, they differ in a number of ways. For starters, they get sent to different places — you send your FBAR to the Financial Crimes Enforcement Network and send Form 8938 to the IRS.

We’ll dive more into the individual FBAR and FATCA filing requirements below, but here’s the quick who-what-where-when comparing the two:

FATCA filing requirements

The Foreign Account Tax Compliance Act (FATCA) is a part of the government’s efforts to combat offshore tax evasion. American expats of all income levels with foreign accounts and assets should know about it. FATCA requirements impact U.S taxpayers and overseas financial institutions:

• U.S. taxpayers with foreign accounts and assets may need to file Form 8938: Statement of Specified Foreign Financial Assets with their annual U.S. Income Tax Return
• FATCA reporting requirements for financial institutions overseas mandates them to disclose information about U.S. citizens who hold accounts overseas

Form 8938 is similar to the FBAR in many ways. However, it has higher reporting thresholds and requires you to disclose certain “non-account” assets such as:

• Business and trust ownership
• Certain contractual investments with foreign parties

FATCA reporting deadline

As Form 8938 is filed with your U.S. income tax return, due dates applicable to Form 1040 apply. Automatic extensions for expats living abroad or additional extensions to October 15 can provide more time to collect needed information from foreign financial institutions and determine your filing requirements.

You can always see up-to-date FATCA declaration deadlines on our expat tax deadlines page.

Who files? FATCA Form 8938 filing thresholds

Who is subject to FATCA reporting? The filing thresholds differ depending on where you lived during the tax year.

If you live within the U.S. the entire tax year, you must file Form 8938 if the value of your reportable foreign assets exceeds either of these levels:

• More than $50,000 (or $100,000 if married filing jointly) at the end of the year, or
• More than $75,000 (or $150,000 if married filing jointly) at any time in the year

Expats living abroad have an increased reporting threshold. You don’t need to complete this form unless your foreign assets exceed either:

• $200,000 (or $400,000 if married filing jointly) at the end of the year, or
• $300,000 (or $600,000 if married filing jointly) at any time during the year

FATCA financial institution reporting

Many foreign financial institutions must report their U.S. citizen and resident clients’ accounts and if you’re an expat who hasn’t been filing FATCA information, that could affect you as you might face penalties and interest.

Ready to file FACTA Form 8938? Whether you file your expat taxes yourself with our online DIY expat tax service designed specifically for U.S. citizens abroad or file with an advisor, H&R Block is here to help.

FBAR filing requirements

The Report of Foreign Bank and Financial Accounts, or “FBAR” serves many of the same purposes Form 8938 does, with a few differences. A main one is that the FBAR goes to the Financial Crimes and Enforcement Network of the U.S. Treasury Department instead of the IRS. The FBAR came into existence in the Bank Secrecy Act of 1970 (BSA). Its purpose was, and still is, to prevent U.S. citizens from hiding assets overseas with the intent to commit tax evasion and money laundering.

By law, you must file FinCEN Form 114 if both of the following are true:

• You’re a U.S. citizen, resident taxpayer or domestic business entity
• You own, control, or have signature authority over foreign bank and financial accounts with a combined value over $10,000

If you were thinking of writing it off or ignoring your reporting obligation, beware: The penalties for willfully not filing can be $100,000 or more.

FBAR filing deadline 2023

The FBAR is filed separately from your tax return and does not go to the IRS. The FBAR deadline is the same as your income tax deadline, with an automatic extension to October 15 available.

You can always see up-to-date FBAR reporting deadlines on our expat tax deadlines page.

Who files? FinCEN Form 114 filing thresholds

You may be required to file an FBAR if you’re A U.S. citizen or green card holder using personal or business foreign accounts for everyday activities

The reporting requirement covers many types of foreign accounts maintained outside of the United States, including:

• Bank accounts
• Securities accounts
• Certain foreign retirement arrangements

The FBAR filing requirement isn’t new, but expats often overlook it. Recent international enforcement efforts have raised awareness of the requirement. Don’t worry, though — your FBAR is only an informational document. No additional tax will be added. However, penalties can be levied if you don’t file or file late.

Need to file FinCEN Form 114 (FBAR)? H&R Block makes it simple to file your U.S. taxes and FBAR together.

Not sure if you should file FBAR vs. FATCA Form 8938? The experts at H&R Block are here to help.

Confused whether you should file an FBAR, FATCA declaration, or both? Don’t go it alone — your H&R Block tax advisor will know exactly what to do with your specific situation. Ready to file?

Get started with H&R Block’s Expat Tax Services today.

The post FBAR vs. FATCA: Filing Requirements for Americans Abroad appeared first on H&R Block®.

As a U.S. expat, you probably have more questions about all three Coronavirus stimulus checks than the average American.

Since you make your income abroad, most of you don’t end up owing U.S. taxes, many of you haven’t filed tax returns in a few years, and some of you have extremely complex tax situations.

To help you out, below we’ve answered the common (and a few uncommon) questions expats have asked about the 2020 and 2021 stimulus checks and how they will (and won’t) affect U.S. citizens who live overseas.

Ready to file your tax return? No matter where in the world you are, we’ve got a tax solution for you. Get started with our made-for-expats online expat tax services today!

Third Stimulus Checks & U.S. Expats: What You Should Know

Q. What does the third stimulus check mean for U.S. citizens living abroad?

A. The third stimulus check is part of the 2021 American Rescue Plan Act (ARPA), a Coronavirus government relief package designed to provide further economic assistance to Americans struggling with the economic impacts of COVID-19. The relief package includes direct $1,400 payments to each eligible individual, plus $1,400 per dependent, including dependents over 17. These payments are technically an advance payment of a 2021 tax credit.

The biggest differences between the third stimulus checks for expats and the other two are the phaseout thresholds and addition of payments for dependents of all ages.

Q. Do expats qualify for the third stimulus check?

A. Yes, expats qualify for the third stimulus check. You qualify if you fall within the income threshold, have a social security number, and file taxes — even if you live overseas.

Q. I’m retired overseas and don’t file a tax return — do I qualify for the third stimulus check?

A. Yes, retired expats may qualify for the third stimulus check even if they aren’t required to file a tax return each year. This also applies to Social Security beneficiaries (both retirement and disability), railroad retirees, and those receiving veteran’s benefits. If you do not receive Social Security retirement benefits, railroad benefits, Social Security Disability Insurance, or veteran’s benefits through the government and you haven’t filed a 2019 or 2020 tax return, you may need to take action to get your payment.

Q. What if I don’t have an SSN but filed a U.S. return. Do I get to take advantage of the third stimulus check?

A. Probably not. To receive a third stimulus check, you generally must have a social security number (SSN).

Q. Will I get a third stimulus check if I filed a joint return with my NRA spouse with an IRS Individual Taxpayer Identification Number (ITIN)?

A. Yes, but you would only get $1,400 instead of the full $2,800, plus $1,400 for each dependent with a Social Security Number.

Q. What if I’m a U.S. expat and I haven’t filed taxes in a few years while I’ve lived abroad? Do I still qualify for the third stimulus check?

A. If you live overseas and haven’t filed taxes in a while, you still may still be eligible for a stimulus payment. However, if you haven’t filed your 2019 return and the IRS doesn’t have your account information through a federal benefits program, you may need to file your 2020 return to qualify for the third stimulus check. For full details, visit the IRS’s website.

We recommend getting started with multi-year expat tax filing today, as the filing process for multiple years of returns can take longer to complete.

Q. How much will my third stimulus check be for?

A. Your third stimulus check depends on your 2020 or 2019 income (whichever tax return the IRS has processed most recently).

Additional Payments: If your third stimulus payment is based on their 2019 return and your 2020 return makes you eligible for a larger payment, the IRS will redetermine your eligibility and issue a supplementary payment (a “top up”) later this summer.

You can estimate your own payment amount with H&R Block’s Stimulus Check Calculator.

Q. Will I have to pay back my stimulus check?

A. No, you will not have to pay back any amount of your Recovery Rebate Credit, even if you experience a pay hike in 2021.

Q. Will this round of stimulus checks affect my tax return this year?

A. The third stimulus check will not affect your 2020 tax return, but it may help your 2021 tax return. If you are eligible for more stimulus money than you receive with the advance payment, you may be able to claim the difference as a credit on your 2021 return that either decreases your tax liability or increases your refund. If you’re eligible for less or received a stimulus check for the full amount of the Recovery Rebate Credit, you don’t have to pay it back and it won’t affect your return.

Q. Will I owe tax on this third stimulus check in 2022 or have to pay it back?

A. No, the third stimulus payment is considered a 2021 tax credit (Recovery Rebate Credit), not income, so you will not need to pay taxes on it or pay it back.

Q. Do I need to sign up for the third stimulus check it or sign off on it?

A. Most people won’t need to do anything to receive the third stimulus because the IRS is going to base the payments off of your most recent tax return, whether that’s 2020 or 2019. If you need to catch up on past returns, we can help you file with amnesty. Get started with multi-year expat tax filing now.

Q. If I live abroad, when will I get my third stimulus check if I qualify?

A. The first round of direct deposits have begun. Once the IRS processes your payment, the IRS Get My Payment website will display when you should expect the payment as well as the account information where a direct deposit will be sent or if a payment will be mailed.

Q. How will I get my third stimulus check if I’m an American living overseas?

A. There are two ways overseas Americans can get their third stimulus payment: Direct deposit or through the mail.

You should get your check via direct deposit if you received your latest tax refund through direct deposit or if the IRS has your direct deposit info from the last round of stimulus checks and you haven’t filed yet this year.

You need to have an account with a U.S. bank in order to get direct deposit.

We recommend you update your address if you:

• Don’t know what address is on file
• Have moved to a different address
• Want your check sent somewhere other than the address they have on file

In addition to Form 8822, Change of Address, you may be able to update your address via phone, through a written statement, or on your tax return. You can see the IRS’ most up-to-date address change info on the IRS website.

Q. What happens if I live abroad and my direct deposit payment is returned by my U.S. financial institution?

A. Once your payment is returned, the IRS will issue your payment by mail as a check or U.S. Treasury-issued debit card. Typically, IRS will reissue the payment by mail within two weeks. Once the payment is reissued, the IRS Get My Payment tool will update to reflect your payment status.

Q. What if my third stimulus check was for the wrong amount?

A. If you didn’t receive the full amount of the third payment you were owed (due to a new baby, lower income, etc.), there are two times when you may receive additional stimulus money:

• With a “top-up” payment later this year: If your third stimulus was based on your 2019 return and the 2020 return you file would qualify you for money, the IRS will re-determine your eligibility 90 days after the filing deadline or by September 1, 2021 at the latest, and issue you an additional payment for the difference later this summer.
• Recovery Rebate Credit next tax year: If you had a change in circumstances in 2021 that would qualify you to receive additional third stimulus money, you can claim a Recovery Rebate Credit when you file your 2021 taxes (in 2022).

Q. Do expats qualify for the advanced 2021 child tax credit in the ARPA?

A. Probably not. You only qualify for the advanced child tax credit if you’ve had your primary abode in the U.S. for more than half the year.

Second Stimulus Checks & U.S. Expats: What You Should Know

Q. What was the second stimulus check?

A. The second stimulus check was part of a December 2020 government relief package to provide financial relief to Americans during the pandemic. The relief package included $600 direct payments to each person with a Social Security Number who cannot be claimed as a dependent and earned under a certain amount of income. It also included up to $600 payments for each qualifying child under age 17.

Q. Did I get a second stimulus check if I’m an American living overseas?

A. Yes, expats qualified for the second stimulus check. You qualified if you fall within the income threshold, have a social security number, and file taxes — even if you live overseas.

Q. Did I need to sign up for it or sign off on it?

A. Most people didn’t need to do anything to receive the second stimulus because the IRS based the payments off of 2019 tax returns. If you didn’t file a 2019 return, you may be able to claim it on your 2020 tax return as a Recovery Rebate Credit.

Q. If I live abroad, when should I have gotten my second stimulus check if I qualified?

A. All of the second stimulus payments have gone out. Most people got a direct deposit.

What if I haven’t gotten my stimulus payment yet?

Q. How much was the second stimulus check for?

A. Your second stimulus check depended on your 2019 income. The full amount was $600 per individual, $1,200 per couple, and $600 per qualifying child under the age of 17. For expats to qualify for the full second stimulus check, you must have had $75,000 or less in income if you filed as single, $112,500 or less if you filed as head of household, or $150,000 or less if you filed jointly with your spouse or as a qualifying widow. You’d also then qualify for a $600 payment per qualifying child.

For those above this income level, your stimulus check amount would lower $5 for each $100 your AGI exceeded the above thresholds.

Q. Did I have to pay back the amount I get?

A. No.

Q. Will this affect my 2020 tax return?

A. It could only help your 2020 return. If you are eligible for more stimulus than you were awarded, you may be able to claim it as a credit on your return that either decreases your tax liability or increases your refund. If you’re eligible for less or received the full amount, you don’t have to pay it back and it won’t affect your return.

Q. Will I owe tax on this second stimulus check in 2021 or have to pay it back?

A. No, this is considered a tax credit, not income, so you will not need to pay taxes on it in 2021 or pay it back.

Q. I’m retired overseas and don’t file a tax return — did I qualify for the second stimulus check?

A. Yes, retired expats may qualify for the second stimulus check even if they weren’t required to file a tax return each year. This also applied to Social Security beneficiaries (both retirement and disability), railroad retirees, and those receiving veteran’s benefits.

Q. What if I didn’t have an SSN but filed a U.S. return. Did I get to take advantage of the second stimulus check?

A. Probably not. To receive a second stimulus check, you generally must have had a social security number (SSN).

Q. Did I get a second stimulus check if I filed a joint return with my NRA spouse with an IRS Individual Taxpayer Identification Number (ITIN)?

A. Yes. These families were eligible to receive second stimulus payments for the members of the family that have SSNs. This change was retroactive to the first stimulus payment, so if you missed out on the first round of stimulus payments because your NRA spouse has an ITIN, you can claim the first stimulus payment as the Recovery Rebate Credit when you file your 2020 tax return.

Q. What if I’m a U.S. expat and I haven’t filed taxes in a few years while I’ve lived abroad? Did I still qualify for the second stimulus check?

A. If you lived overseas and haven’t filed taxes in a while, you still may still be eligible for the stimulus payments. For full details, visit the IRS’s website. We recommend getting started today with Virtual Expat Tax Services today, as the filing process for multiple years of returns can take longer to complete.

First Round of CARES Act Stimulus Checks: What Expats Should Know

Q. What did the CARES Act 2020 Coronavirus stimulus check mean for U.S. expats?

A. The CARES Act stimulus check expats got in 2020 was technically a 2020 tax credit in advance.

It was part of the CARES Act Coronavirus stimulus package, which was designed to help get the economy back on its feet while we navigate the COVID-19 pandemic. In it are a variety of benefits for both individuals and corporations to ease the financial burden of the shutdowns and shelter-in-place orders. For the average American, the main benefits are cash payments and a variety of other debt relief options. The amount each taxpayer got depends on a variety of factors.

Q. Did I qualify for a CARES Act stimulus check if I live overseas?

A. Yes, expats qualified for the CARES Act stimulus checks. You qualified if you fell within the income threshold, had a social security number, and filed taxes — even if you lived overseas. If you didn’t get it, you can still apply for it retroactively as a tax credit on your 2020 tax return.

Q. What is the Recovery Rebate Credit?

A. If you didn’t get the full amount you were owed, you may be able to apply for the Recovery Rebate Credit. Any eligible individual who did not receive the full amount of the recovery rebate as an advance payment, also known as an Economic Impact Payment, can claim the Recovery Rebate Credit on a 2020 Form 1040 or Form 1040-SR.

Q. Could I have gotten a CARES Act stimulus check if I filed a joint return with my NRA spouse with an IRS Individual Taxpayer Identification Number (ITIN)?

A. Yes, retroactively. Couples filing jointly where one spouse is a nonresident alien did not initially receive a stimulus payment, but this can be changed on your 2020 taxes. The second round of stimulus checks changed that provision so that Americans with NRA spouses can still get last year’s aid.

Q. How much was the CARES Act stimulus check for?

A. Your 2020 expat CARES Act stimulus check amount depended on your 2019 income. The payments were based on income thresholds, which you can see in the table below.

Q. Did I have to pay back the amount I got?

A. No

Q. Will I owe tax on this check in 2020?

A. No, this was considered as 2020 tax credit, not income, so you will not need to pay taxes on it in 2020.

Q. How would I have gotten my CARES Act stimulus check if I’m an American living overseas?

A. There are two ways overseas Americans got their stimulus payment: Direct deposit or through the mail.

Haven’t gotten your CARES Act stimulus check yet?

H&R Block’s Expat Tax Advisors are here to help you with your stimulus taxes no matter where you are

We understand this is a stressful, confusing time, and that’s why our Expat Tax Advisors will be standing by ready to help. No matter where in the world you are, we’ve got a tax solution for you — whether you want to be in the driver’s seat with our DIY online expat tax service designed for U.S. citizens abroad or want to let one of our experienced Tax Advisors take the wheel. Head on over to our Ways to File page to choose your journey and get started.

At H&R Block, we’re committed to providing information you can trust and use to help navigate the changing tax landscape for Americans abroad. Visit our Expat Coronavirus Tax Impact page for the latest information on how the Coronavirus has affected expat taxes in 2020 and 2021.

The post U.S. Expats & Coronavirus Stimulus Checks: Top FAQs for Americans Living Abroad appeared first on H&R Block®.

The Foreign Account Tax Compliance Act (FATCA) Summarized for Americans Abroad

It used to be pretty easy for Americans to get around paying their fair share of taxes by hiding money in foreign banks. To prevent this, U.S. lawmakers passed the Foreign Account Tax Compliance Act (FATCA) which required foreign banks to share financial information with the U.S.

If you are a U.S. citizen or green card holder living abroad and have foreign assets or foreign bank accounts, you may need to file Form 8938 when you file your U.S. tax return if the value of your assets exceeds certain thresholds. FATCA reporting requirements for financial institutions overseas mandates them to disclose information about U.S. citizens who hold accounts overseas. Your foreign bank may have you fill out a U.S. tax document (form W-9) so they can comply with these rules.

If you haven’t been filing U.S. tax returns, FATCA reporting can result in the IRS discovering your failure to file. Don’t worry! H&R Block can help you catch up.

Why FATCA was created

The U.S. Treasury created FATCA to ensure U.S. citizens abroad follow U.S. tax rules.

Before implementation, the U.S. government discovered that they were losing billions of dollars in tax revenue per year thanks to U.S. taxpayers stashing cash in overseas banks and other financial institutions. To combat this, the U.S. drafted legislation—the Foreign Account Tax Compliance Act—that would require other countries to disclose any financial accounts held by Americans abroad.

Its success depends on the cooperation of other countries. To make the whole thing work, each participating country signs an intergovernmental agreement (IGA) that incorporates FATCA into their local laws. You can see which countries have signed IGAs below.

The IRS has a complete FATCA PDF summary on the IRS website.

FATCA reporting requirements

Who is subject to FATCA reporting? Well, both individuals and financial institutions need to disclose information related to FATCA:

• Individual U.S. taxpayers may need to file FATCA Form 8938
• Institutions need to disclose information about U.S. citizens with accounts overseas. How each country goes about that depends in their individual IGA with the U.S.

FATCA vs FBAR

Tax law is an alphabet soup of acronyms, and many U.S. expats confuse your FATCA declaration with Foreign Bank Account Report (FBAR) reporting.

While these two forms are similar, FATCA and FBAR have slightly different reporting requirements. For example, the people who need to fill out FACTA are U.S. citizens, residents, and certain non-resident aliens. The FBAR is filed by the above and a wider range of tax filers, including estates, trusts, and other financial entities with assets abroad. Residents and entities in U.S. territories also have to file FBARs, but not FATCA forms

A big difference between the two is the government organization responsible and where you file them. Your FBAR reports any assets in foreign financial institutions to the Financial Crimes Enforcement Network of the U.S. Treasury, or FinCEN. Your FATCA reports assets in foreign financial institutions to the IRS.

You may have to fill out one or both of these forms. If you’re unsure, we recommend you leave it to the pros.

FATCA countries with declarations or treaties

The following are countries with FATCA declarations or treaties with the U.S.:

File FATCA documents and your Expat Tax Return with H&R Block

Have more questions? Ready to file your FATCA declaration? No matter how complicated your U.S. tax return is, there’s an expat tax expert ready to help. Get started with Virtual Expat Tax Preparation from H&R Block Expat Tax Services.

The post What is FATCA? appeared first on H&R Block®.

Offshore voluntary disclosure refers to U.S. taxpayers who have had foreign accounts, assets, or income and either did not report it accurately or simply did not file U.S. tax returns and international forms. Unlike the streamlined disclosure, an important aspect of the OVDP was even those taxpayers who willfully did not comply with U.S. tax laws could still apply for the program. Another difference with the OVDP was that the program did not necessarily waive criminal penalties.

Note: The IRS is shutting down the OVDP in September of 2018. There has been no announcement of a replacement program.

The post Offshore Voluntary Disclosure Program (OVDP) appeared first on H&R Block®.

Ready to file your 2020 expat taxes? We can help.

How Coronavirus travel restrictions affect your U.S. expat taxes

If you’re an expat whose time abroad was disrupted by Coronavirus, you still may qualify to claim the Foreign Earned Income Exclusion and housing exclusion when you file your 2020 taxes in 2021.

Normally, you’d have to pass either the Bona Fide Residency Test or the Physical Presence Test in order to claim the FEIE. However, if you failed to qualify due to travel restrictions from Coronavirus, you’re in luck — the IRS waived the time requirements for the FEIE and foreign housing exclusion.

You qualify for the FEIE COVID-19 relief if:

• You were required to leave China, Hong Kong, or Macau between December 1, 2019, and July 15, 2020, or
• You were living abroad in another country and were required to leave between February 1, 2020, and July 15, 2020

Ready to file your U.S. expat taxes? We’ve got a tax solution for you—whether you want to DIY your expat taxes or leave it to one of our experienced Tax Advisors.

How the Coronavirus stimulus checks (Economic Impact Payments) affect your U.S. expat tax return

To provide relief to U.S. citizens affected by Coronavirus, the U.S. government passed three rounds of stimulus checks and legislation.

It’s important to note that many expats still have not received the first or second checks due to mail unreliability. If that’s you, skip ahead to the “Missing Payment” section.

Ready to file? Get started with an Expat Tax Advisor now.

Recap of first, second, and third stimulus payments for U.S. citizens abroad

The first round of stimulus payments included up to a $1,200 payment to each qualified individual as well as up to $500 for certain dependents. They were rolled out over the summer of 2020, and as of December 1, 2020, most Americans abroad had already received their first stimulus check.

The second round of stimulus payments included up to a $600 payment to each eligible individual and $600 per qualifying child, based on your adjusted gross income. For expats to qualify for the full second stimulus check, you must have had $75,000 or less in adjusted gross income (AGI) if you file as single, $112,500 or less if you file as head of household, or $150,000 or less if you file jointly with your spouse or as a qualifying widow(er). You’ll also then qualify for a $600 payment per qualifying child. So, if you filed jointly with your spouse, have two children under age 17, and earn under the income threshold, you’re theoretically eligible for up to $2,400.

The third round of stimulus payments include up to $1,400 payments to each eligible person ($2,800 for married couples filing jointly), plus $1,400 per dependent, including dependents over 17. These payments are technically an advance payment of a 2021 tax credit. While the lower income thresholds to get the full $1,400 are the same as the second stimulus check, if your income is above the threshold, the credit phases out much faster:

The credit phases out for taxpayers with adjusted gross income (AGI) between:

• Single – $75,000 and $80,000
• MFJ – $150,000 and $160,000
• HOH – $112,500 and $120,000

If your income is above the upper thresholds for your filing status, you won’t receive an advance payment.

The biggest differences between the American Rescue Plan Act (ARPA) stimulus checks and the other two stimulus payments are the addition of payments for dependents of all ages and the income phase-out levels.

You can estimate your own payment amount with H&R Block’s Stimulus Check Calculator.

Eligibility for the stimulus check has been a big topic of discussion and the source of much confusion. If you are a U.S. citizen or resident with a Social Security number, cannot be claimed as a dependent by someone else, and you fall within the income brackets, you qualified for the stimulus checks.

If you haven’t filed a tax return for 2019 or 2020 and do not receive Social Security benefits, railroad benefits, Supplemental Security Income (SSI) benefits, or veteran’s benefits through the government, you may need to take action and file a 2020 tax return to get your payment or to claim the RRC for the first two payments, if you didn’t receive enough.

If you’re a U.S. expat and still haven’t received your stimulus checks:

Before doing anything, check the status of your third payment with the IRS’ “Get My Payment” tool.

If you are an American living overseas and were supposed to get the first two stimulus payments but haven’t yet, there could be a few reasons:

• You didn’t have a U.S. bank on file for direct deposit and your check was mailed
• You had the wrong bank account on file
• You’ve moved to a different address than the one on file with the IRS
• You owe child support. If you’re overdue on child support payments, the IRS said it would deduct them from your first stimulus check amount

Stimulus payment missing or destroyed and you live overseas? You can have the IRS trace it.

Many U.S. citizens and Green Card holders abroad have had the same problem with the stimulus checks — they were mailed but never received. In this situation you can ask the IRS to trace each check and, if those checks have not been cashed and the trace is processed before you file, you’ll be able to treat them as unpaid for purposes of claiming the Recovery Rebate Credit on your 2020 tax return.

The IRS won’t process a trace until:

• 4 weeks since the payment was mailed by check to a standard address for the first stimulus payment; after February 24, 2021 for the second payment
• 6 weeks since the payment was mailed, and you have a forwarding address on file with the local post office for the first EIP; March 10, 2021 for the second EIP
• 9 weeks since the payment was mailed, and you have a foreign address for the first EIP; March 31, 2021 for the second EIP

While the IRS will not be able to provide traces for the second payments until the beginning of April, we can still work with you to get the process started now. A word of warning — if you experienced a pay hike in 2020, your payment will be based off your higher income.

To file the trace yourself, you must mail or fax a completed Form 3911, Taxpayer Statement Regarding Refund, to the IRS. You can find detailed instructions on how to do this yourself on the IRS website, and you must follow them exactly. Currently, the IRS is estimating traces to take about six weeks, but processing may be delayed due to staffing shortages.

Because the process is highly detailed and a bit convoluted, we can help you out and file the trace for you as a $75 add-on to your expat tax filing. Get started with an Expat Tax Advisor now.

Claiming the Recovery Rebate Credit in lieu of missing stimulus payments for Americans abroad

You may still be able to receive a 2020 tax credit (known as a Recovery Rebate Credit) for the first or second stimulus payment, even if you received both stimulus payments, if you qualify for a larger amount based on your 2020 circumstances.

For example, if you have a non-resident alien spouse with no Social Security Number or if you didn’t receive a child payment, you can still rectify the situation and claim the credit when you file your 2020 Form 1040 or 1040-SR.

Line 30 on your 2020 return is the most important line on that form if you want to take advantage of the Recovery Rebate Credit. If you do not fill out Line 30, you will not get the credit. Of course, you don’t need to worry about this when you leave it to one of our trusted Expat Tax Advisors.

If you got an IRS letter, “Notice 1444 Your Economic Impact Payment,” save it — you’ll need the amount of the payment in the letter when you file.

Visit the IRS economic impact payment FAQ for additional details. Get started with an Expat Tax Advisor now.

If you didn’t receive the full amount of the third payment you were owed (due to a new baby, lower income, etc.), there are two times when you may receive additional stimulus money:

• With a “top-up” payment later this year — if your third stimulus was based on your 2019 return and the 2020 return you file would qualify you for more money, the IRS will re-determine your eligibility and issue you an additional payment for the difference later this summer.
• Recovery Rebate Credit next tax year — if you had a change in circumstances in 2021 that would qualify you to receive additional third stimulus money, you can claim a Recovery Rebate Credit when you file your 2021 taxes (in 2022).

American Rescue Plan Act and the child tax credit expansion for U.S. citizens abroad

In the American Rescue Plan Act signed into law in March 2021 was a provision to enhance the child tax credit for the year of 2021.

Unfortunately, most U.S. expats will not qualify for this refundable child tax credit option. You only qualify for the refundable child tax credit option if you’ve had a primary U.S. abode for at least half the year. Here are a couple examples of when you may and wouldn’t qualify:

• If you and your family returned to the U.S. before June 2020 because of COVID-19 and have remained in the U.S. since with no intention of moving back abroad in 2021, you might be able to qualify for the refundable child tax credit.
• If you and your family returned to the U.S. in 2020 because of COVID-19 and have since moved back abroad with no intention of returning to the U.S., you would not qualify for the refundable tax credit.
• If you and your family remained abroad through the pandemic, you would not qualify for the refundable child tax credit.

However, if you may still qualify for the regular child tax credit for U.S. citizens abroad and benefit from some of the enhanced version — you might get a child tax credit of up to $3,000 for a child age 6 to 17 and up to $3,600 for a child age 0-5.

Get started with an Expat Tax Advisor now.

Need help navigating Coronavirus tax implications for U.S. citizens abroad? Ready to start your 2020 U.S. expat taxes? H&R Block is here to help.

The year 2020 was full of pivots, tax changes, and uncertainty; and that’s why the experts here at H&R Block have been working tirelessly to make sure we’re ready to help with your specific tax situation. There’s a lot to digest, so if you’re confused about your COVID-19 tax situation, let us handle your expat tax filing for you.

Whether you file expat taxes yourself with our online DIY expat tax service designed specifically for U.S. citizens abroad or file with an advisor, H&R Block is here to help. Head on over to our Ways to File page to choose your journey and get started.

The post Coronavirus & U.S. Expat Taxes in 2020/2021 appeared first on H&R Block®.

Foreign Earned Income Exclusion eligibility in normal times

If you wanted to claim the 2020 Foreign Earned Income Exclusion (FEIE) in normal times, you’d have to have a permanent home overseas and pass either the Bona Fide Residency Test or the Physical Presence Test—both of which have a requirement that you spend a certain number of days in your resident country.

To qualify for the Bona Fide Residency Test, you’d have to have a proven tax home in a foreign country and have lived there for an uninterrupted 12-month period including an entire tax year. For the Physical Presence Test, you’d have to be in that foreign country for 330 full days during a consecutive 12-month period.

Travel bans, quarantines, and closed borders caused many expats to postpone a planned move, become stranded in their existing country, or have to move back to the U.S. unexpectedly. As a result of this disrupted time, many would normally fail to qualify for the Foreign Earned Income Exclusion on their 2020 taxes.

Changes to eligibility for the 2020 FEIE and foreign housing cost due to COVID-19

To help out these U.S. expats, the IRS provided relief for U.S. expats wanting to qualify for the 2020 Foreign Earned Income Exclusion. This 2020 FEIE waiver waives the time abroad thresholds for the FEIE and foreign housing exclusion if the taxpayer fled their resident country due to Coronavirus within a specific time frame.

You qualify for the FEIE COVID-19 relief if:

• You were required to leave China, Hong Kong, or Macau between December 1, 2019, and July 15, 2020
• You were living abroad in another country and were required to leave between February 1, 2020, and July 15, 2020

How to claim the Coronavirus FEIE time abroad waiver on your 2020 taxes

Does either of the above describe your situation? Then you qualify for the COVID-19 2020 Foreign Earned Income Exclusion time abroad waiver.

To claim the waiver, you’d write “Revenue Procedure 2020-27” in the top margin of a fully filled-out Form 2555, the form you file to claim the FEIE. You’ll then attach it to your 2020 tax return. If you’re filing with H&R Block Expat Tax Services, we will take care of all this for you, so you can focus on staying safe and getting your life back to normal.

H&R Block is here to help with your 2020 FEIE waiver

All of us at H&R Block Expat Tax Services are working tirelessly to stay on top of all the COVID-19 tax changes, and we’re here to help you navigate them. After you upload your documents to your expat tax portal, we’ll match you with an advisor who will guide you through the process and make sure to get you as many credits, exclusions, and deductions as possible.

During these times it’s important you take care of yourself, and we’re happy to take the stress of taxes off your shoulders. Get started today and let us take care of the rest!

The post Coronavirus & Foreign Earned Income Exclusion 2020 qualification changes appeared first on H&R Block®.