Dual US-Canadian citizens qualify for covid-19 emergency payout

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Dual US-Canadian citizens qualify for covid-19 emergency payout

Dual American-Canadian citizens living in Canada can receive the full US covid-19 emergency benefit even if they earn almost $150,000 more than US residents, it has transpired.

The US Internal Revenue Service (IRS) needs to have received a tax filing from dual citizens residing in either the US or Canada since 2018 in order to qualify for citizens to the payment.

Many dual citizens in Canada have been filing taxes with the IRS for years, yet their bank details are unknown to US authorities. This means some will have to wait months to receive their cheques, unlike many dual citizens residing in the US, who have already received their payouts.

Somebody living outside the US would earn more income than somebody living in the US and be eligible to receive that benefit because of this Foreign Earned Income Exclusion."

The payments will be sent to the address as filed on their previous tax declaration to the IRS.

In March, the Washington DC administration announced a $2trn stimulus package, which included support in the form of "helicopter money" to help American families through the covid-19 lockdown.

In the weeks that followed, more than 130 million Americans received a cheque from the government worth up to $1,200. 

Ed Ungar, co-vice chair of Democrats Abroad Canada, told CBC "Most of them are surprised, really surprised about it, because … there are people who've been here 40 years and they've never gotten a cent from the U.S. government, except some who get U.S. social security cheques, and they aren't many — and now all of a sudden they are getting $1,600."

"They are really happy to get it, but it wasn't something they counted on," Ungar said.

The major difference when it comes to US citizens living abroad is that they are allowed to be exempt by up to US$103,900 (CAD$146,000) of income from their 2018 tax filing, or US$105,900 (CAD$149,000) of income from their 2019 return.

"Somebody living outside the US would earn more income than somebody living in the US and be eligible to receive that benefit because of this Foreign Earned Income Exclusion," said Kevin Kirkpatrick, a US tax lawyer with the international firm Moodys.

A 2016 Canadian census revealed that almost 377,500 people in Canada identify as either fully or partly American.

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Christopher Copper-Ind

Christopher Copper-Ind is editor-in-chief of International Investment. Before this, he was editorial director of The Business Year, from 2014 to 2017.