CARES Act: “Nonresident Aliens” Not Eligible for Stimulus Funds

CARES Act Eligibility for Immigrants

The Coronavirus Aid, Relief, and Economic Security or CARES Act was passed by Congress and signed into law by President Trump on March 27, 2020. The law is intended to support the U.S. economy amidst the ongoing COVID-19 pandemic and provides a variety of financial tools to assist businesses and individuals. Employers and employees should take note of some of the most significant provisions of the bill.

Stimulus Rebates for Individuals 

The CARES Act authorized payments of $1,200 to each eligible individual, as well as $500 per child. The rebates are reduced for taxpayers making over $75,000 (or $150,000 for married couples), up to the income cap: individuals making $99,000 per year or married couples bringing home $198,000 annually would not be eligible for stimulus payments.

The bill excludes “nonresident aliens” from the eligibility guidelines, but the term “nonresident alien” is not defined by immigration regulations. Instead, the Internal Revenue Service (IRS) defines an alien as an individual who is not a U.S. citizen or U.S. national and a nonresident alien as an alien who has not passed the green card test or substantial presence test. Green card holders or lawful permanent residents are generally considered to be resident aliens unless their status is abandoned or terminated. The substantial presence test is determined by the days an individual is physically present in the country, unless those days meet one of the exemptions for temporary travel or you hold certain nonimmigrant statuses such as F, J, M, or Q visas.

To meet the substantial presence test for the calendar year, an individual must be physically present in the U.S. on at least:

  1. 31 days during the current year, and
  2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
    • All the days you were present in the current year, and
    • 1/3 of the days you were present in the first year before the current year, and
    • 1/6 of the days you were present in the second year before the current year.

In most cases, F-1 international students may not qualify for the stimulus funds but an H-1B visa holder paying U.S. taxes and meeting the substantial presence thresholds could be considered a resident alien and therefore may be eligible for the rebates. The CARES Act requires individuals to have utilized a Social Security number in their most recent tax return filing, so while a foreign national may be work-authorized with a valid SSN, spouses or dependents without Social Security numbers would not be eligible for funds. Individuals filing tax returns using an Individual Taxpayer Identification Number (ITIN) are not eligible for the stimulus funds under the CARES Act. This ineligibility extends to tax returns for joint filings in which one taxpayer uses an ITIN while the other uses an SSN. There is an exception for military families using an ITIN, but the bill excludes many immigrant workers from receiving the rebates.

Unemployment Insurance

While each state has its own rules and requirements for receiving unemployment benefits, the CARES Act provides additional protection through increased compensation and longer periods of eligibility for benefits.

  • For up to four months, additional payments of $600 per week are available under the Federal Pandemic Unemployment Compensation provision of the bill. These payments are in addition to the amounts set and distributed by the state.
  • Short-time compensation programs were established for employees working reduced hours due to the pandemic.
  • Self-employed workers and independent contractors unable to work due to COVID-19 may be eligible for the Pandemic Unemployment Assistance program through December 31, 2020.
  • Unemployment benefits are extended for an additional 13 weeks through December 31, 2020.

Unemployment benefits are considered an “earned benefit” and therefore are not included as part of the public charge inadmissibility determination when applying for a green card. It is important that you check the eligibility and documentary requirements for your state when applying for unemployment benefits and that you comply with the terms of your immigration status.

Paid Leave

The CARES Act extended family and sick leave to employees laid off for certain COVID-19 medical and caregiving needs. The leave applies to workers employed by organizations with fewer than 500 employees and can be used between April 1, 2020 and December 31, 2020. This leave is not restricted by immigration status and any employee, whether part-time or full-time or new to an employer, is eligible for the leave immediately. The exceptions would be for employees who are first responders or medical personnel: given their essential nature during the current outbreak, employers may be able to deny this leave.

Stay tuned for more information on how the CARES Act applies to small business owners. We will answer questions on how taking advantage of a Small Business Administration loan or the Paycheck Protection Program may affect your immigration status or whether non-U.S. citizens are eligible for certain programs.

Visit Challa Law Group’s COVID-19 Resource Page for Employers & Foreign Workers to read about other critical immigration updates or email us at info@challalaw.com with any questions.