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Millions of tax-paying immigrants will not receive any financial assistance from the largest emergency aid deal in United States history.

On March 27th 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) into law, authorizing sorely-needed economic relief for many families and businesses here in the United States. The $2 trillion stimulus package is an important step toward mitigating the economic impact of COVID-19, but it leaves millions of immigrants and “mixed-status” families, many of whom perform essential services in the U.S., in the dark.

In this post, we will explore what the CARES Act is, how much relief it provides for individuals and families, and who is eligible to receive such relief.

If you require any immigration assistance in the wake of the COVID-19 outbreak, we are always here to help! Please reach out to us through our contact form here, or by email at info@mcenteelaw.com.

What is the CARES Act?

The CARES Act is an entirely unprecedented relief package, totaling over $2 trillion USD, that will provide emergency relief to U.S. families and businesses impacted by the COVID-19 pandemic. The Act includes provisions for frontline healthcare providers, small businesses, and corporations. Perhaps most importantly, the Act includes an estimated $560 billion that the Federal Government has set aside to support individuals and families* during this time.

*Please note that the government mandated financial relief is based on eligibility – not everyone will be entitled to it. We will discuss such eligibility in greater detail below.

Individuals & Families

Under the Act, individuals who earn less than $75,000 can expect to receive a one-time payment of $1,200 from the government. Married couples who file taxes jointly and earn less than $150,000, will receive the full $1,200 payment each. Parents with children should also expect to receive $500 per child. For example, a qualified family of 3 earning less than $150,000 annually can expect to receive a payment of $2,900.

Payments will scale down for single individuals earning over $75,000, and for joint filers earning over $150,000. Payments phase out entirely for single individuals earning over $99,000, and for joint filers earning over $198,000. These one-time payments are considered recovery rebates. These payments are NOT counted as taxable income. On your 2020 tax returns, you must report any payment(s) you received from the government, but it will not increase your tax liability for the year. We would recommend you discussing any tax-related questions with an accountant or tax attorney.

The U.S. government will use your most recent federal tax return to determine how much relief you might receive and how you will receive it. For qualified individuals and families who have already submitted their 2019 taxes, the U.S. government will refer to their Adjusted Gross Income (AGI) for tax year 2019 to calculate payment. For those who have not yet filed their 2019 taxes, the government will calculate payment using the AGI from their 2018 Tax Returns.

So, who actually is eligible to receive this one-time payment?

Who is qualified to receive a one-time payment?

All U.S. citizen taxpayers are eligible to receive financial assistance from the government. Deferred Action for Childhood Arrivals (DACA) and Temporary Protected Status (TPS) holders are also eligible to receive a one-time payment. However, according to the National Immigration Law Center, only immigrants with a valid Social Security Number (SSN) AND who qualify as a “resident alien” will be eligible to receive financial assistance. In the United States, you are classified as a “resident alien” for tax purposes if you meet the Green Card Test OR the Substantial Presence Test.

  1. The Green Card Test: You are a “resident alien” of the United States if you have a permanent or conditional Green Card.

  2. The Substantial Presence Test: If you do not have a Green Card, but have spent 31 days in the United States during the current year AND 183 days during the three-year period that includes the current year and the two-years immediately before that, you are considered a “resident alien.” However, individuals in possession of A, F, G, J, M, and Q visas are exempt from this test, as are individuals who are present in the United States to receive required medical treatment.

If you do not meet either of these tests, you are more likely than not to be classified as a “non-resident alien.” For more information on the Substantial Presence Test please see here.

However, individuals who meet these conditions could still be disqualified from receiving any financial assistance. Jackie Vimo, an Economic Justice Policy Analyst at the National Immigration Law Center, stated that if the spouse or child of a qualified individual does not have a Social Security Number (SSN), then no one in that household we will able to claim the one-time payment from the government. Equally, if any member of the household possesses an ITIN, no-one in the household will be eligible to receive the one-time payment.

For example, if someone lives in a “mixed-status household”, meaning that if any member of the family uses an Individual Taxpayer Identification Number (ITIN) rather than an SSN, the family will not qualify for any economic relief. The only exception to this is if one spouse holds a valid SSN and the other spouse served in the military in the previous tax year.

According to recent estimates by the Migration Policy Institute, 16.7 million people live with at least one unauthorized family member. This includes approximately 5.1 million United States citizen children under the age of 18. The Institute on Taxation and Economic Policy estimates that ITIN filers collectively contribute $11.74 billion in state and local taxes each year. In 2015, ITIN filers paid $23.6 billion in total federal taxes. Many DACA holders (who on paper are eligible to receive the government’s one-time payment) live in “mixed-status” households. Many DACA holders are husbands, wives, and parents of U.S. citizen children who, through no fault of their own, will be excluded from receiving financial relief from the government.

The Miami Herald quotes a recent National Immigration Law Center statement in which they voice their utter disappointment at the Federal Government. They are quoted as stating “shamefully, several million immigrants and their families across the country will not receive a dollar from this COVID-19 relief package…immigrants are on the front lines fighting this virus.”

We are disappointed that the Act does not provide the support and protection immigrant workers and their families deserve during this unprecedented crisis. As always, our team is here to help immigrants explore their options at this time.

If you have questions about any of the above, or you require immigration assistance during this unprecedented time, please do not hesitate to reach out to us through our contact form here or by email at info@mcenteelaw.com.

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