The IRS starts accepting e-filed 2021 returns as from January 24

Third stimulus check for US expats

March 20, 2021

Another $1.9 trillion stimulus package in response to the COVID-19 pandemic has been approved. This relief package, also known as ‘The Rescue Plan’ includes a third stimulus check – and yes, Americans abroad are also eligible! Here’s what we know so far.

Are expats eligible for the third stimulus payment?

Yes! The third stimulus payment will follow the same eligibility requirements as the first two stimulus payments, which are:

  1. You need to have a social security number.
  2. You fall below the income threshold of $99,000 ($198,000 for married couples).
  3. You need to be current on filing your expat taxes – this is so that the IRS has up to date information to process your stimulus payment!

How much is the third stimulus check for Americans living abroad?

US expats and Americans abroad will receive a maximum of $1,400 ($2,800 for married couples) plus an additional $1,400 for each dependent. If you have a family of four, you could receive up to $5,600! This is the highest payment so far!

Interestingly, in order to claim a stimulus payment for your dependents, the Rescue Act does not require your dependent to be under the age of 17 anymore. The third stimulus payment extends to any dependent – no matter their age.

Like the first two stimulus payments, the base amount for the third stimulus payment will also be reduced gradually if you have an adjusted gross income higher than $75,000 (for married couples $150,000).

Is the third stimulus payment taxable?

As with the first and second stimulus payment, the third stimulus payment will be an advance payment of the Recovery Rebate Credit for the 2021 tax year. As such – it will not be part of your taxable income!

When can expats expect the third stimulus payment?

We expect swift action from the IRS to deliver the third stimulus payments. We have customers who already received it through direct deposit. Expats are encouraged to file their 2020 expat tax return as soon as possible to ensure the IRS has updated details in order to facilitate payment.

How can I get my third stimulus payment as an expat?

The IRS will send payments electronically if they have your US bank account on record. If they don’t have your US bank account details on record, they may send you a paper check or pre-paid debit card in the mail. Of course they need to be aware of your address. If not, make sure you e-file your return so that the IRS has a record of you on file.

What if the IRS does not have my bank account details on record?

If the IRS does not have your US bank account details on record, then you should consider filing your 2020 expat tax return as soon as possible and include your bank details when e-filing. In addition – most expats have already received a refund when e-filing their 2020 expat tax return with Expatfile by claiming the Recovery Rebate Credit.  You can also estimate your expected 2020 refund from the Recovery Rebate Credit by using our calculator.

What if I don’t have a US bank account anymore?

If you don’t have a US bank account anymore, the IRS will send you a paper check or pre-loaded debit card by mail to your last known address. You will want to make sure the IRS has your updated details by e-filing your 2020 expat tax return.

If you want to open a US bank account, many of our users have opened a US account with TransferWise and have successfully received direct deposits from the IRS to their TransferWise account.

That’s all for now. We will be continuously monitoring the progress of the third stimulus payment and keeping this article updated to make sure you get the latest news and developments.

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