NPR reported Tuesday that thousands of foreign workers who were in the U.S. on temporary visas erroneously received $1,200 stimulus checks in the error-prone process of distributing financial aid across the country to blunt the coronavirus pandemic’s economic impact.
Foreign workers living overseas were able to receive the checks by filing incorrect tax forms accidentally—or on purpose—that made them appear as U.S. residents, and therefore entitled to the payments.
The likelihood of a foreign worker getting a check increased if they had a U.S. address on file with the IRS, along with an American bank account and Social Security number, with the latter being issued to noncitizens by the Department of Homeland Security.
The unintended consequence of the erroneously issued checks is that the stimulus payments are being spent abroad instead of within the U.S., which is where the funds were intended to inject life into the economy.
NPR estimates that if 5% of the over 700,000 student and seasonal workers who entered the U.S. in 2019 received checks, it would total over $43 million in payments.
Some workers recognized their error, NPR reported, and are trying to amend their returns out of fear the mistake could cost them their visa status, green card applications or ability to return to the U.S.
Another problem with the checks is related to a Trump administration halt on visas for seasonal workers, as people in that category have received checks, but cannot reenter the U.S. in order to spend the money here.
At least 129 countries. According to one tax preparer, that’s how many countries—so far—have had citizens erroneously receiving U.S. stimulus checks, NPR reported.
What to watch for
It’s possible that foreign workers who mistakenly received checks in the first round could get another one in the anticipated second round of $1,200 payments, according to one tax specialist NPR spoke with. The U.S. government acknowledged that some foreign workers mistakenly received the checks, and told NPR it is reviewing options to make sure it doesn’t happen again.
Confusion over which forms foreign workers need to fill out when filing taxes likely added to the number of incorrect returns, NPR reported. Most U.S. residents fill out a Form 1040 when filing their taxes. Foreign workers, however, need to file a Form 1040-NR (with the NR standing for “nonresident”). It’s also possible that software like TurboTax contributed to the incorrect tax returns. The revelation of foreign workers receiving stimulus payments is, however, the latest gaffe in the stimulus package that was passed by Congress in March. In late May, reports emerged that people were accidentally throwing out their stimulus payments, as some received prepaid debit cards in the mail that were mistaken as credit card offers. As of June, a House committee report said between 30 to 35 million people were still waiting for their checks, while the IRS warned that some people could be waiting until 2021 to receive a payment. By July, the U.S. Treasury was canceling $1.4 billion in checks erroneously sent to dead people. Congress is now debating over a fifth stimulus package, with Republicans and Democrats sharply divided extending federal unemployment benefits, among other measures. Both sides of the aisle and President Trump agree, however, on the need for a second round of direct payments. It’s highly likely that the next bill will include a provision for $1,200 checks that is structured very similarly to the first round.