U.S. stimulus money heading to Canada

Americans living abroad receiving $1,200 cheques

• Thousands of people in Canada can expect a letter shortly from the U. S. Treasury Department.

However, you’re ( probably) not in trouble. In fact, you’re most likely receiving a US$ 1,200 cheque thanks to America’s stimulus package.

One of the responses to the COVID-19 pandemic put in place by the U. S. government was Economic Impact Payments. Through it, most current American citizens who filed taxes in 2018 or 2019 will automatically be sent US$ 1,200 ($ 1,680) as long as they make less than US$ 75,000 if they are single or US$150,000 if married.

And that includes U. S. citizens in Canada. Unlike Canadian benefit programs put in place during the pandemic, the U. S. program doesn’t require beneficiaries to live in their own country.

“The reason being that the U. S. is one of only two countries in the world that tax based on citizenship. So a U. S. citizen, wherever they live in the world, is always subject to U. S. tax, which is different than Canada,” said Mark Feigenbaum, an Ontario- based attorney and accountant specialized in cross-border taxes.

But that doesn’t mean his Canadian clients aren’t surprised when the money suddenly arrives in their mailboxes.

“I get a couple of pictures of cheques every day from clients,” he said. “First of all, they weren’t maybe even aware that they were supposed to get a cheque, and secondly, that they were even qualified for a cheque. And then they got a bunch of money.”

According to Statistics Canada 2016 census data, 284,870 people in Canada have U.S. citizenship.

One of them is Charles Lewis, a dual U. S. and Canadian citizen who received a cheque in the mail last week.

“I read three weeks ago that the payment was coming to those who file so when it did come I was not surprised at all. It came in an envelope from the U. S. Treasury Department. Soon as I looked at the envelope I knew what it was. I had to laugh that Trump’s name was on the cheque, given it’s not his money,” Lewis told the National Post. “I think those who get it and were not really in need should donate it to charity, which is what I’m going to do. It’s really found money. I did nothing to earn it. Though filling out all those tax forms every year was a pain in the ass.”

According to the Internal Revenue Service, the agency that administers the Economic Impact Payment program, nearly 750,000 stimulus cheques have gone out to “foreign addresses,” totalling $1.2 billion.

But the IRS can’ t say how many of those went to people in Canada.

“Foreign addresses don’t necessarily imply non-americans. Members of the military and U. S. citizens who live or work abroad would be in that category, along with non- citizens who may have, for tax purposes, U. S. resident alien status,” spokesman Eric Smith said via email.

“The domestic numbers likely also include resident aliens, and Canadians are likely in both the domestic and foreign categories,” Smith said.

A large number of U. S. citizens living in Canada are also interested in finding out how they can get their hands on an American stimulus cheque.

According to Steve Nardi, chair of Democrats Abroad Canada, a workshop his group hosted a few weeks ago about the American stimulus package attracted 600 people, 80 per cent of whom were from Canada.

“In the last two weeks, I’ve had another thousand people on tax- filing webinars, and most of them are interested in at least accessing the information about the stimulus cheques,” Nardi said in an interview.

He said he’s mainly encountered two groups of recipients: those who knew from the very start that they’d receive a cheque, and those who were stunned ( and sometimes concerned) when the money arrived at their door.

“I had emails from members asking if they were eligible, and the only thing that happened at that point was the Senate approved the (stimulus) bill late the night before.

“It hadn’ t even gotten across the building to the House yet,” he recounted.

“And then we’ ve had others who were completely shocked that they would be eligible with no expectation.”

But be warned, if you’re an American in Canada who’s eligible to apply for the Canada Emergency Response Benefit ( CERB) because you lost your job due to COVID-19, you may want to think twice before cashing that US$1,200 cheque.

To be eligible to receive CERB payments, you have to have made less than $ 1,000 in the period during which you’re applying. Depending on if the Canada Revenue Agency determines that stimulus money from the American government is revenue or not, depositing that cheque from the U. S. may make you ineligible for CERB.

Employment and Social Development Canada was not able to provide a comment.