In response to the COVID-19 outbreak, the US government rolled out the emergency CARES (Coronavirus Aid, Relief and Economic Security) Act.
Essentially, it is a stimulus package that provides workers (earning less than $75,000 per year) with a one-time payment of $1,200.
The stimulus payment can only be claimed by US citizens, permanent residents, and residents for tax purposes (individuals who can pass the Substantial Presence Test) who have a valid Social Security Number (SSN), who have filed their 2018 tax return (in 2019), or their 2019 return (in 2020) and who will be considered a qualifying resident alien for the 2020 tax year.
For more details on how US residency for tax purposes is determined, check out this blog post.
Countless international students and scholars who had filed (either correctly or incorrectly) as residents for the 2018 or 2019 tax year have received the $1,200 payment.
But what should you do if you previously filed as a resident, have subsequently left the US, and have received the payment?
Am I entitled to the payment if I previously filed as a resident?
Just because you previously filed as a US resident, does not necessarily mean that you are entitled to the payment.
If you left the US
If you have left the US you are not eligible to keep the stimulus check as you will not be considered a qualifying resident alien for the 2020 tax year.
Therefore, you will not be considered a qualified resident alien for the 2020 tax year, you should return the payment to the IRS as soon as possible.
If you made an error in filing
Many international students accidentally file as a resident when they should have filed as a nonresident aliens. So if you have received the stimulus payment, it’s a good idea to double-check whether your previous return was filed correctly.
You can determine your residency status by completing the Substantial Presence Test for free using Sprintax.
And if you are confused about your tax residency status, you can find out more information in our guide to everything you need to know about your US residency status!
If you discover that you made an error on your tax documents, you will need to amend your tax return and file form 1040X.
You can easily amend your tax return online using Sprintax Returns (formerly Sprintax Tax Preparation).
How to return a CARES stimulus check that you received in error
It is important to return the stimulus payment if you believe that you received it in error.
You should return the payment separately to your amended return. In other words, the IRS is advising that you do not add the CARES payment to the check or electronic transfer you submit to cover your tax liability.
Instead, you should follow the directions below.
If you received the payment as a paper check and have not yet cashed it:
- Write “Void” in the endorsement section on the back of the check.
- Mail the voided Treasury check immediately to the appropriate IRS location listed below.
- Don’t staple, bend, or paper clip the check.
- Include a note stating the reason for returning the check.
If you received the payment as a paper check and cashed it, or if you received the payment as a direct deposit:
- Submit a personal check, money order, etc., immediately to the appropriate IRS location listed below.
- Write on the check/money order made payable to ‘U.S. Treasury’ and write ‘2020EIP’, and your taxpayer identification number (Social Security Number, or Individual Taxpayer Identification Number).
- Include a brief explanation of the reason for returning the payment.
You can find out here where to mail the payment.
What will happen if I don’t return the payment?
If you receive the stimulus payment in error you should return it to the IRS.
If you keep the payment you may jeopardize your future US visa or Green Card applications.
Got questions about US tax?
At Sprintax, we know US tax can be confusing. Especially for nonresidents!
Our Live Chat team is happy to help anytime 24/7. They will assist in any of your tax-related queries!
