US Government’s COVID-19 Relief Bill excludes Tax-Paying Immigrants

March 30, 2020 by Prabalta Rijal

The latest bill passed by the US senate ‘The Coronavirus Aid, Relief and Economic Security Act’, has excluded foreigners who are classified as ‘non-resident aliens’ from accessing the $2.2 trillion relief funds. The bill clearly specifies that foreign nationals who have been classified as ‘non-resident aliens’ will not be eligible for the $1,200 per adult and $500 per child benefit planned by Congress for this spring. We panic it is very important to understand who is a ‘non-resident alien’.

Who are Non-Resident Aliens?

A non-resident alien is a person who is not a U.S. citizen and who does not meet the ‘Green Card’ or the ‘substantial presence test as described in IRS Publication 519, U.S. Tax Guide for Aliens.

In general:

  • F and J student visa holders are non-resident aliens during their first five calendar years in the U.S.
  • J professors and researchers are non-resident aliens during their first two calendar years in the U.S.
  • H-1, TN, and O-1 visa holders are non-resident aliens until they meet the “substantial presence” test.

What we need to know about The “Substantial Presence” Test

The “substantial presence” is a test for tax purposes for foreign nationals on a non-immigrant visa status. If the foreign national meets the test criteria then they may be considered as a resident alien for tax purposes. To pass the test the person must physically be present in the U.S. for at least the following number of days:

  • 31 days during the current calendar year and
  • 183 days during the three-year period that includes the current calendar year and the two years immediately preceding. The individual should count: all the days he/she was present in the U.S. in the current year, 1/3 of the days present in the U.S. the preceding year, and 1/6 of the days present the year before that.

Exceptions to the time counted toward the Substantial Presence Test for students and scholars in F-1 and J-1 status (and their dependents):

  • A J-1 professor or researcher who is complying with the requirements of the visa, does not count days for the first two calendar years.
  • An F-1 or J-1 student, who is complying with the requirements of their visa, does not count days for the first five calendar years.

How does the new bill affect Tax Paying Immigrants?

As of March 26, The US has the highest total of diagnosed coronavirus cases in the world, exceeding China and Italy. The death rates in the country are also expected to soar over the next two weeks or so. Hence The decision to cut off immigrants from Coronavirus assistance a disgrace most of the researchers, medical health professionals and other tax-paying immigrants who are in the frontline of this crisis will be left out from the relief package.

The National Immigration Law Center (NILC) described the decision to pass the bill in the Senate as ‘disgraceful’. NILC Executive Director, Marielena Hincapié, said: “How can the government justify cutting off so many from financial aid amid a public health crisis, which even the President has described as a ‘national’ emergency?”

“Immigrant workers and families who are paying taxes have been cut out from receiving a single dollar. Since no other relief package appears imminent, the stakes are high for millions of low-wage workers and immigrants, who also need economic support and access to health care.”

Similarly, New York’s Republican representative, Alexandra Ocasio-Cortez, lashed out at the Senate on Twitter, saying: “Thanks to the GOP, these relief payments will come off the backs of tax-paying immigrants, who get nothing.”Emigrants and experts who arrived in the US over the past year or so on various visas will be hit hard by this decision as they may not have cleared the substantial presence test although they have been paying their taxes since their arrival to the US.