U.S. TAX GUIDE IN BRAZIL
Can US expats in Brazil still claim their COVID-19 stimulus payments in 2024?
Yes, if you’re a US citizen living in Brazil, you are still likely eligible for the COVID-19 stimulus payments.
Many people living abroad mistakenly believe that they can’t claim these payments, but that’s not the case.
As long as you meet the eligibility criteria, you may receive stimulus payments.
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Eligibility Criteria for Stimulus Payments
- Be a US Citizen or Resident Alien: You need to have a valid Social Security Number (SSN) issued before the tax return filing deadline April 18, 2022. This applies even if you live abroad.
- Meet Income Requirements: Your Adjusted Gross Income (AGI) must fall within the specified limits. For the first round of payments, individuals with an AGI up to US$75,000 (or US$150,000 for married couples filing jointly) were eligible for the full payment, with reduced amounts available for higher incomes.
- File a Tax Return: Even if you live outside the US, you must have filed a US tax return for the relevant year (usually 2019 or 2020, depending on the payment round) to be considered for the stimulus payment.
- Not Be Claimed as a Dependent: You must not be claimed as a dependent on someone else’s tax return.
How do US expats in Brazil claim their stimulus payments?
To claim the stimulus payments, the IRS requires you to file a US tax return.
You do this by reporting it as a tax credit on your US tax return. However, it’s crucial to file your return by the deadline—April 2025—if you want to claim the third stimulus payment, which was US$1,400 per adult and per dependent.
What are the income limits to qualify for the US$1,400 stimulus payment?
The income limit to receive the US$1,400 stimulus payment is US$75,000. That’s $75,000 Adjusted Gross Income (AGI), which is not the same as total income.
If your total AGI in 2021 was less than US$75,000, you could claim the US$1,400 payment.
Can deductions such as the standard, FEIE, and FHE help me get my stimulus payment?
Let’s say you’re a US citizen living in Brazil with a gross income of US$140,000 in 2020.
Under normal circumstances, this income level would disqualify you from receiving the full COVID-19 stimulus payment, as it exceeds the AGI limit for individuals (US$75,000 for a full payment).
However, if you qualify for the Foreign Earned Income Exclusion (FEIE), you could exclude up to US$107,600 of your foreign income from taxation for the 2020 tax year (this amount increased to US$112,000 for 2022 and US$126,500 for 2024).
Example Scenario:
- Gross Income: US$140,000
- FEIE Exclusion (2020): US$107,600
Calculating Adjusted Gross Income (AGI)
US$140,000 (Gross Income) – US$107,600 (FEIE Exclusion)
= US$32,400 (AGI after FEIE)
With an AGI of US$32,400 after applying the FEIE, your income is now well within the eligibility threshold for the full stimulus payment.
If the FEIE were not applied, your AGI would remain at $140,000, disqualifying you from the stimulus payment, or at best, reducing the amount significantly.
Why haven’t some US expats in Brazil claimed their stimulus payments?
Some may not have filed a tax return because they didn’t know they needed to, while others might have assumed they weren’t eligible due to their residency abroad.
This has led to many expats missing out on the stimulus money they are entitled to.
If you’re in this situation, remember that you can still claim your payment by filing a tax return before the deadline. It’s important not to overlook this opportunity because it’s essentially money that’s owed to you.
What do I do if I haven’t claimed my stimulus payments in 2020 and 2021?
If you didn’t claim your stimulus payments for 2020 or 2021, you can still get them by filing a Recovery Rebate Credit (RRC) on your tax return.
To do this, you’ll need to submit a tax return for the year you missed the payment, even if you normally don’t file one.
Here’s how it works
When you file your tax return for 2020 or 2021, you’ll need to include the Recovery Rebate Credit on your Form 1040 or Form 1040-SR.
This credit allows you to claim any stimulus payments you were eligible for but didn’t receive. If you already filed your taxes but didn’t claim the payments, you can file an amended return using Form 1040-X to include the credit.
To avoid delays, make sure you have all necessary information, including your income details, Social Security number, and banking information if you want the payment deposited directly into your account.
Remember, if you’re married and filing jointly, both you and your spouse will need to meet the eligibility requirements to receive the full payment.
Can I check the status of my stimulus payments?
Yes, you can check the status of your stimulus payments.
While the IRS’s “Get My Payment” tool is no longer available, you can still verify whether you received your stimulus payments by reviewing your tax returns.
The first and second stimulus payments, issued in 2020, and the third payment, issued in 2021, should have been reported on your tax returns for those years.
Here’s how you can check:
- Review Your Tax Returns: Look at your 2020 and 2021 tax returns to see if you claimed the Recovery Rebate Credit. This credit reflects any stimulus payments you were eligible for but did not receive. If you didn’t receive the payments, the credit would have increased your tax refund or reduced your tax liability.
- Check Your IRS Account Online: You can log in to your IRS account on the IRS website to view your tax transcripts. These transcripts will show any payments made to you, including the stimulus payments. If you don’t have an IRS account, you can create one.
- Request a Payment Trace: If you believe a payment was issued but you never received it, you can request a payment trace through the IRS. This process involves submitting Form 3911, “Taxpayer Statement Regarding Refund.”
What if I get government benefits? Will these payments count against eligibility? Or unemployment insurance?
If you’re receiving government benefits, such as Social Security, unemployment insurance, or other types of assistance, the good news is that your stimulus payments will not affect your eligibility for these benefits.
The stimulus payments are considered a tax credit, not income, so they won’t be counted as part of your taxable income or used to determine your eligibility for most government programs.
For example, if you’re receiving unemployment benefits, the stimulus payments won’t reduce the amount of unemployment assistance you receive.
Similarly, if you’re on Social Security or another benefit program, the payments won’t count against the income limits that determine your eligibility.
However, it’s important to keep in mind that while the stimulus payments themselves don’t affect your benefits, any interest earned on the money after it’s deposited could potentially count as income.
If you’re concerned about how receiving the stimulus payments might affect your specific situation, it might be helpful to consult with a tax professional or financial advisor who understands both US and Brazilian regulations.
