Many of our clients have contacted us concerning the stimulus benefits in the CARES Act and what it means for them. What about the public charge? Unemployment? Here are five key takeaways from the CARES Act that you have been wanting to know:
1) Collecting Unemployment Does Not Make You a Public Charge– Given the new rules that were recently published and took effect on February 24, 2020, many are wondering how the expansion of unemployment to cover 39 weeks, including for contract workers may affect their ability to adjust status in the future. The short answer is that it will not. The I-944 and questions pertaining to public charge as written in the new regulations do not consider unemployment to be a “public charge.”
However, it is important to note that some nonimmigrant workers (H1Bs, H2As and H2Bs, L1s, etc.) may have their status interrupted as a result of becoming unemployed. While there is a 60-day grace period each employee may have to find a new job, that may be difficult given the economic downturn. Before any of these individuals apply for unemployment, he or she should speak with a qualified immigration attorney concerning extension or change of status. That could impact the individual’s ability to receive unemployment, even if he or she is not going to be considered a public charge in the future.
2) You Can Get a Stimulus Check If You Paid Taxes with a Valid Social Security Number and Work Authorization: All individuals who paid taxes this past year (or 2018, if 2019 was not filed), are eligible for the stimulus payment who meet the income guidelines so long as that individual has valid work authorization and a valid social security number. That includes TPS beneficiaries, applicants for asylum, applicants for adjustment of status, and U or T nonimmigrants.
3) BUT You May Not Get the Payment If You Filed Your Taxes With a Dependent or Spouse Who Does Not Have a Social Security Number: As with the stimulus bill from 2008, the law specifically disallows the payment of stimulus money to individuals who filed their tax returns with a spouse or dependent who does NOT have a social security number, and instead files with an ITIN. The only exception to this general rule is individuals who are in the military and have a spouse who is overseas. Examples of individuals who may be excluded are US Citizens who file with a spouse that is undocumented, even if that individual is in the process of obtaining permanent residency through a waiver or other program. It also applies to individuals who claim children as dependents who are not in the United States, but instead, are dependents with ITINs.
4) Stimulus Payments are an Advance on Tax Credits: Many individuals have questioned whether the money will need to be paid back. And while not 100% clear, tax experts generally agree that the credit will be applied next year, and that the payment is an “advance” on the credit that would be paid on a 2020 return. So you are safe to collect the money without worrying that it will need to be paid back.
5) Paycheck Protection Program Loan Programs: Small business owners can also take advantage of SBA loans which will help maintain payroll and the payment of independent contractors. This is a huge advantage for our small business clients who may have seen a downturn in business but want to keep their employees on through these difficult times. The act requires that you maintain ALL of your employees/contractors through the duration of the crisis, and so long as the money is used for payroll purposes, rents, and other specified qualifying line items, the loan will ultimately be forgiven.
It is important to be sure that your immigration status is secure, even with the help that is being offered in the stimulus package. Make sure that your work authorization remains valid, so that you can take advantage of these incredible programs. Speak with a member of our team about your options today!