Is My Immigration Client Eligible for a Recovery Rebate under the CARES Act?
By AILA’s USCIS HQ (Benefits Policy) Committee
On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion dollar economic recovery package. The package offers relief to state and local governments, individuals, small and large businesses, and hospitals affected by the 2019 novel coronavirus (COVID-19) pandemic. In particular, the CARES Act provides for the issuance of one-time payments, called recovery rebates, (or commonly known as “stimulus checks”) to help individuals recover from the economic impacts of the COVID-19 pandemic. AILA has received questions from members regarding the eligibility requirements for these payments and the impact on public charge inadmissibility determinations for foreign nationals who receive these payments. The following practice alert is intended to provide an overview regarding the recovery rebates set forth in the CARES Act.
How Much Is the Recovery Rebate?
Eligible individuals with an adjusted gross income up to $75,000 can receive a one-time payment of $1,200. Married couples filing a joint tax return are eligible to receive a payment of $2,400, as long as their adjusted gross income is less than $150,000. Eligible individuals can also receive an additional $500 for each eligible child under the age of 17.
The recovery rebate is reduced by $5 for every $100 of adjusted gross income (AGI) above $75,000 for individuals, $112,500 for heads of households, and $150,000 for married joint filers. The amount is completely phased-out for single tax filers with adjusted gross incomes exceeding $99,000, $146,500 for head of household filers with one child, and $198,000 for joint filers with no children.
The recovery rebate is to be automatically advanced to eligible individuals in 2020 based on their 2019 federal income tax return. For eligible individuals who did not file a 2019 return, the rebate is to be automatically advanced based on 2018 tax return information.
Who Is Eligible for a Recovery Rebate?
Only individuals with valid Social Security numbers and people who qualify as “resident aliens” as defined by the IRS are eligible to receive the payment. Non-U.S. citizens are considered nonresident aliens unless they meet one of two tests set forth by the IRS: the green card test or the substantial presence test.
Green Card Test: Lawful permanent residents of the United States are considered resident aliens if they were lawful permanent residents at any time during the calendar year. This is known as the "green card" test. Lawful permanent residents continue to have U.S. resident status under this test unless they voluntarily renounce and abandon their status in writing to the USCIS, their immigrant status is administratively terminated by the USCIS, or their immigrant status is judicially terminated by a U.S. federal court.
Substantial Presence Test: A foreign national is considered a “resident alien” if he or she meets the substantial presence test for the calendar year. To meet this test, an individual must have been physically present in the United States for a designated minimum threshold period outlined by the IRS. Note that the IRS exempts certain nonimmigrant visa statuses from the physical presence calculation, such as individuals temporarily present in the U.S. under a F, J, M, or Q visa. Most work-authorized immigration statuses, such as H-1B, L-1, O-1, and TN, are not exempted and may be able to meet the substantial presence test.
Importantly, those who file their taxes using an Individual Taxpayer Identification Number (ITIN) are not eligible for a recovery rebate. Moreover, the CARES Act denies the rebate to an eligible individual with a Social Security number if the individual filed a joint return with a spouse who has an ITIN or filed a return with a qualifying child who has an ITIN. There is a limited exception for adopted children and military families. From a practical standpoint, this will mean that many H-1B and other work-authorized nonimmigrants will not be eligible for a recovery rebate if they filed a joint income tax return with a spouse who is not eligible for, and thus does not have, a social security number. An H-1B worker whose H-4 spouse is not eligible for a social security number, for instance, and who filed a joint income tax return with his or her H-4 spouse, will not be eligible for a recovery rebate.
Will Receiving a Recovery Rebate Impact My Client’s Immigration Application under the Public Charge Rule?
The recovery rebates are structured as automatically advanced tax credits to be disbursed by the Treasury Department. The DHS final rule on inadmissibility on public charge grounds is clear that tax credits are not taken into account for the purpose of a public charge determination. DHS indicates in its final rule that only public benefits as defined in 8 CFR 212.21(b) will be considered in the public charge inadmissibility determination. 8 CFR 212.21(b) defines public benefit to include means-tested programs like Medicaid and cash assistance for income maintenance, however 8 CFR 212.21(b) indicates that cash assistance for income maintenance does not include tax credits. Furthermore, USCIS indicates in Volume 8, Part G, Chapter 10 of the USCIS Policy Manual that tax credits are not considered public benefits in a public charge inadmissibility determination.
Similarly, the Department of State (DOS) Interim Final Rule and the Foreign Affairs Manual (FAM) align with the DHS final rule in that the DOS interim final rule and FAM indicate that for the purposes of defining “public benefit”, cash assistance for income maintenance does not include tax credits. AILA's DOS Liaison Committee is seeking additional clarification from DOS regarding how consular officers will factor in tax credits in public charge determinations at U.S. consulates overseas.
Additional resources regarding the CARES Act and other federal programs available to support individuals and families during the COVID-19 pandemic:
Understanding the Impact of Key Provisions of COVID-19 Relief Bills on Immigrant Communities by the National Immigration Law Center
Immigrant Eligibility for Public Programs During COVID-19 by Protecting Immigrant Families
Cite as AILA Doc. No. 20040642 | Dated April 6, 2020
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