Liberty and justice for all United States persons abroad

The Isaac Brock Society

Posted on by Posted in Issues regarding US persons abroad 47 Comments

Well, as confirmation of how confusing this all is, the article reports that:

On the one hand:

Canadians with U.S. citizenship, who may not have paid taxes in the U.S. for decades, still qualify for the Trump administration’s one-time pandemic support payment.

Q. Is he talking about Canadian’s who don’t pay US taxes or who don’t file US taxes?

But on the other hand:

In order to get the payment, Canadians with dual U.S. citizenship and U.S. citizens living and working in Canada must have filed a tax return with the Internal Revenue Service for 2018 or 2019 reporting their global income.

Well, as been discussed endlessly at Brock, people actually don’t have to file US tax returns to be theoretically entitled to this.

The plot thickens

In some cases, people who qualify for the payment can also get the full U.S. COVID-19 benefit payment while earning substantially more per year than they would if they lived in the United States because of special tax exemptions only available to American ex-pats.

Yup, it’s absolutely true. This is the result of Americans abroad (living in Canada) may be entitled to the benefits of the Foreign Earned Income Exclusion. This means that their AGI tally doesn’t start running until their income exceeds the FEIE limitation. Look’s like Congress wasn’t aware of Americans abroad. Who could have known?

And The Obligatory Comment From Democrats Abroad:

“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,” said Ed Ungar, co-vice chair of Democrats Abroad.

“They are really happy to get it, but it wasn’t something they counted on.”

Ungar said he does not know of anyone who has received the payment but said most of the people he’s spoken to are convinced the payment will arrive within six months.

Somehow this reminds me of the play “Waiting For Godot”.

When Government Giveth, Government Usually Taketh

All indications are that …

1. Because the US payment is administered as a tax credit, it is NOT considered to be taxable income in the United States (how cool is that?).

2. But, Canadian residents (which I think includes Americans as long as they are Canadian residents) are required to include their CERB payment in their Canadian taxable income. (How unjust!! Don’t renounce your US citizenship yet.)

What will you do with all the found TAX FREE money?

Many Brockers advocate for using it to pay the fees to renounce US citizenship.

What about donating it to fund one of the anti-FATCA lawsuits?

By the way, comments to the article are presumably open.

47 thoughts on “CBC reports the entitlement of Canadians to US COVID-19 relief – how will you spend your payment?”

  2. Interesting they failed to mention that the non-filer form may work for anyone with an SSN who’s never filed, with either a Canadian address or US bank account. I’ve seen plenty of reports of money arriving outside the US (both paper and digital) but nothing specific to the non-filer form yet.

  3. I’m a fully compliant tax filer. Born in the US but lived abroad and have citizenship elsewhere since the 1970s. I would love if this money made its way to me to offset the stupid accounting fees I’ve had to pay over the years but I am doubtful.

  4. @Susan

    If you qualify (AGI below US$75k) then you should receive the money automatically. Direct deposit if you have an account number on file that was used for a past refund, otherwise they will mail you a cheque at some future date, with a nice letter from Mr. Trump.

  5. Yes but Canadians living in the US don’t get the Canadian part of it (CERB) , and US persons living in Canada risk exposing themselves to the IRS to get this temptation money if they’re not in the system and they have to deal with that nightmare going forward!

    CERB is Residency Based, Take a hint from this situation Canada’s Supreme Court for the upcoming APPEAL!

  6. My sympathies to people still living in the U.S. They only get a one time payment of up to $1600 US dollars to offset the tragic economic effects of COVID 19 and the following mismanagement of the situation. Renunciation of US citizenship and living here in Canada is preferable my point of view. They can keep the one time payment. However, I do enjoy collecting US social security every month.

  7. ”U.S. citizens living abroad who wish to retain their American citizenship are required to file a U.S. tax return every year detailing their worldwide income.”

    No. It’s only those who don’t file taxes who can retain their US citizenship.

  9. “However, I do enjoy collecting US social security every month. ”
    IMO, this has has nothing to do with the relief money . SS pension is something worked for ,contributed into by the taxpayer, and does not necessarily apply to citzenship.It is earned ,therefore,deserved money.

    Begs the question as to how many renunciants we would have if suddenly the US tax system would be overhauled resulting in favor of filling out IRS tax form for everyone overseas and at home . A refund for almost everyone. All the arguments about US cbt, fatca ,would go up in smoke, I’d reckon.

  10. I don’t think the US tax system will ever be over hauled in favor of the US tax payer, overseas or at home due to the very large US debt. The relief money is a very poor sum to offset the tragic consequences of having an insufficient health care system on US soil. And yes, my social security benefits were earned but thank God I also have Canadian retirement benefits. So let’s support the lawsuit and support Canadian sovereignty and the sovereignty of other nations from US extraterritorial taxation.

  11. Report today via reddit of an previously non-compliant Accidental in Australia using the non-filer form to successfully receive $1200 into a Transferwise account. So apparently that has worked at least once.

    All we need now is for the US government to double the offer, and renunciation is free for anyone with a valid SSN who can also pull this off.

  12. @ PatCanadian

    Of course, such an eventuality is possible only in the twilight zone. My point being is the question of cbt,fatca being an issue of financial burden or a matter of principle. In which direction would the balance swing ?

    I fully support the lawsuit financially and in principle.

  14. There have been reports of people who have renounced US citizenship and are the proud owners of a Real CLN, having received the $1200 payment. Brockers will see this as partial refund of their renunciation fees.

  15. As predicted. I can’t imagine there will be a great rush to return any of those cheques uncashed (digitally or otherwise).

    Halfway there, and already rumblings of another. Almost too good to be true.

  17. Not surprised at all about Scheer, but can he actually transmit US citizenship to his kids? He wasn’t born there, and I think they need a SSN to get the payment.

  18. True, the kids may be spared. How long until someone in the media figures out he’s got $1200 coming his way? I can’t imagine he’s earning over US$180,000. This is extremely funny.

  19. He would not get it if he’s filing with his NRA spouse. At least not yet. Lawsuits are pending.

  20. “Not surprised at all about Scheer, but can he actually transmit US citizenship to his kids? He wasn’t born there, and I think they need a SSN to get the payment. ”

    As I understand it , if Andrew Scheer’s US born father ,James, passed 5 years in the US, and at least two of those years over the age of 14, Andrew Scheer’s four children could claim US citzenship. It this true, I woiuldn’t be surprised that they and Daddy are already in possession of US passports,thank you. I think somebody should ask HIM that. But his answer most likely ” No one ever asked me and since I am not running for leadership ,it is none of your business”.

  21. @RR

    You’re actually wrong on that. Citizenship transmission with the 5-year rule is from the parent, not the grandparent. There is a way for US citizenship to be obtained via grandparents, but it’s complicated.

  22. @ RH

    ” If a parent is a US citizen “at birth,” but unable to “transmit” citizenship to a child because the parent  did not live in the US before the child’s birth for the required period of time, under current U.S. immigration laws, Section 322 of the ACT, the only possibility of obtaining (transmitting)  U.S. Citizenship through American grandparents is as follows:

    the child is under 18 , and in the legal custody of the US citizen parent; The child’s parent is a US citizen, by either birth or naturalization.The child’s US citizen grandparent lived in the US (or US possession), for at least five years, two of which were after the grandparent’s 14th birthday.

    Reference here is http://www.apsanlaw.com. Scheer’s children are 14 years old or less ,so the recent rules apply. I would bet that they already have US passports.

  24. @RR

    I think we may be talking past one another here. From what I’ve seen the grandparent route is a bit of an undertaking – the child must travel to the US and “naturalize” with some sort of sponsorship. (I’m writing from memory and can’t be bothered to search.) It’s quite possible that the grandparent needs to meet the 5 + 2 residency criteria for this scheme to work; in other words it’s a necessary but not sufficient condition. A parent simply registers the birth abroad if they meet the 5 + 2 rule; but for a child to obtain citizenship through a grandparent it’s more complicated.

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