expat network

US Expats In Line For Potential Tax Windfall

US Government’s Covid Stimulus initiative

The US Government’s Covid Stimulus initiative offers a tax silver lining to US Expats and Green Card Holders.  Those with children could receive a double tax windfall in the form of Child Tax Credit.  Tax returns need to be filed by June 15th to take advantage of financial benefits.

UK-based US citizens and green card holders could be in line for a double win courtesy of the US Government if they submit their tax returns. Carrying over from the pandemic, the US Government’s Covid Stimulus initiative offers a chance to receive a significant sum in the form of a tax refund, totaling at US$3,200 for adults and US$2,500 for dependents. Lack of education about this may lead to millions of dollars being left on the table by US expats in the UK.

“Those earning less than US$75,000 can claim the money as a refund on their 2020 and 2021 US tax returns,” explained Rose-ann De Villa, CPA EA & Tax Manager of Expat Tax Online. “For expats who have yet to file their tax claims for 2020 and 2021, they can still do so within three years’ time of the original filing deadline of 15th April 2021.” 

There were approximately 166,000 American nationals residing in the United Kingdom in 2021. “All US Expats living abroad are obligated to file a US federal tax return irrespective of tax due,” commented Rose-ann. “Not filing could result in serious consequences. The Stimulus payment and Child Tax Credit provide a positive impetus for US Expats, accidental citizens and Green Card holders – many of whom may be unaware of their eligibility.”

Another potential windfall for US expats struggling with the current economic climate is the Child Tax Credit (CTC), a refundable credit that reduces families’ tax liability by a certain amount per qualifying child. Many US families living in the UK do not know they are eligible for a $1,500 US Child Tax Credit Refund per child without paying any US tax. As long as the children have their own Social Security Number and are under 17 years old, tax filers are likely eligible if their UK income is between £15,000 – £180,000 per annum.

Even after decades of living abroad, US Expats are still obliged to file their tax returns, and in doing so may have the opportunity to collect stimulus payments from the US Government.

“I have lived in the UK for nearly 20 years and didn’t realise that I still had to pay US taxes,” said Katie Greene, a US citizen living in England. “Despite not having filled in a tax return form in years, I was still able to claim both the Covid Stimulus and, even better, the Child Tax Credit – neither of which I knew I would be eligible for. Being aware of my obligations and the potential tax refunds, I was able to claim the stimulus payments correctly and do what was best for me and my family.”

Commenting on the impending April 18th deadline, Rose-ann said: “US citizens here in the UK need to be aware of the confusing deadlines. Getting the return started early allows you to identify potential rebate opportunities to claim the benefits and reduce your tax liability.” Regarding the status of non-citizens who can also benefit from the stimulus initiative, she continued: “For Permanent Resident Card holders, even if their Green Card is expired, they can still be eligible for stimulus as the document only expires in terms of immigration purposes, not when it comes to US taxes.