With millions of American residents receiving $1200 stimulus checks, and millions more still waiting, thousands of foreign students and workers who filed taxes for 2018 or 2019 are receiving theirs – by accident. And they don’t know what to do about it.
A survey of over 500 US universities at the end of April found that 43% of these schools had foreign students report that they wrongfully received $1200 stimulus checks. The IRS has issued no guidance on how to return these checks, leaving their recipients to wonder if they should hang onto the cash to return later or just spend it fearing serious repercussions.
Many of these people no longer even live in the United States. The recipients of these mistaken stimulus checks are largely college-aged foreign students and workers who were in the United States on F-1 or J-1 visas and filed taxes for 2018 or 2019 via TurboTax, which is an e-filing program designed for US residents, not temporary students and workers. Instead of filing the correct tax form 1040-NR, through TurboTax, they filed a 1040. This glitch is common, with the majority of the country’s almost 400,000 J-1 visa holders not filing at all, or filing incorrectly by accident. While the IRS rarely catches this glitch, this year it may have far-reaching consequences with stimulus payment recipients accidentally committing tax fraud. Neither the IRS or TurboTax has issued any guidance on recipients can fix this.
F-1 and J-1 visa holders from 2018 and 2019 are not the only ones mistakenly receiving stimulus checks. Marketwatch reported that thousands of deceased US residents who filed taxes for 2018 or 2019 before dying have been receiving checks. The IRS has issued no guidance for surviving relatives who receive these checks either.
With the intention of expediting the cash dissemination process, the CARES Act specifically states that if you receive too much money in your stimulus payment, it is considered a math error or clerical error on the part of the IRS and it does not need to be repaid. However, it is doubtful those who received checks in error are off the hook.
We anticipate the IRS will issue guidance soon on how to return mistaken stimulus payments. In the meantime, we recommend holding off on spending until stated legal consequences become clear.
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