U.S. citizens living overseas now have a check from the government to look forward to, but getting their hands on it won’t be easy.
Tax professionals say U.S. expatriates should file their tax returns quickly, foregoing the IRS’s 90-day filing extension, and include bank account information so the government can more quickly deposit the funds, which could total $2,400 for couples that make $150,000 or less.
The pandemic highlights challenges for expatriates, who already can face complications in complying with U.S. tax law. Individuals living abroad may face delays as they await the check, which could be expired once it arrives. It can take between four and six months for individuals overseas to receive checks from Treasury, and the checks themselves are often only valid for 90 days, tax professionals said.
Plus, individuals with foreign phone numbers would be barred from remotely depositing the money into a U.S. bank. Many bank branches overseas are closed amid government social-distancing efforts.
“Congress doesn’t have a good understanding of what concerns that community has because they are not really tracking them and understanding where and who they are,” said Marylouise Serrato, executive director for the advocacy group American Citizens Abroad.
Individuals who didn’t list a bank account on their return last year and who filed already this year without providing the information can expect a mailed check from Treasury. Filing now will help speed up that process, practitioners said.
“If you’re anticipating a refund, I would advise you to file sooner rather than later so that Treasury has that information to use for the rebate,” said Peter Stratos, partner at Rose Financial Solutions LLC in Rockville, Md.
The IRS and Treasury didn’t return requests for comment.
Expatriates were initially concerned their overseas income would bar them from getting the checks, but the exclusion was removed in the final version of the legislation, which President Donald Trump signed into law (Public Law 116-136) last week.
The foreign-earned income exclusion would have reduced the U.S. citizen’s adjusted gross income to zero, making most expats ineligible for the rebate. A 2018 or 2019 tax return is now the only condition.
“This is gigantic news for expats who for years have been treated very badly by the tax code. For the first time in recent history, their hurt has been recognized and addressed,” said Monte Silver, a U.S. citizen operating an accounting and law firm in Israel.