The CBC Confirms that: "Dual Cdn-U.S. citizens qualify for Trump's stimulus" https://t.co/NmoDJAxaN4
— U.S. Citizen Abroad (@USCitizenAbroad) May 9, 2020
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.