President Trump signed the eagerly awaited Coronavirus Aid, Relief, and Economic Security (CARES) Act on March 27, 2020. What does it mean for people who are affected by COVID-19 and living here on work-authorized visas? They, like their colleagues who are US citizens and permanent residents, have also been furloughed without pay, laid off, and affected by university closures. But, unlike their colleagues, nonimmigrant workers are also at risk of involuntarily violating or even losing their US immigration status during COVID-19. To understand why, see our earlier blog, COVID-19: How Do Furloughs Affect Nonimmigrant Workers? Unfortunately, the Act is silent on the fate of these workers. While it provides general relief that may also aid nonimmigrants, their eligibility for that relief is not entirely clear.
Will nonimmigrants receive any help from CARES?
Maybe. While CARES does not resolve their immediate concerns about immigration status, a positive aspect of the Act is that nonimmigrant workers may receive cash payments to help meet their immediate financial needs. Of the $2 trillion stimulus package, CARES allocates $300 billion in stimulus money to individual relief. CARES also provides for expanded employment benefits that will assist nonimmigrant workers and US workers alike, including provisions on paid leave, rehired employees, and sick leave.
Which nonimmigrant workers are eligible for cash payments under the CARES Act?
Nonimmigrants who are resident aliens for tax purposes, have Social Security numbers, and have reported Adjusted Gross Incomes (AGIs) of up to $75,000 ($150,000 if married/filing jointly) may receive one‑time cash payments of $1,200 ($2,400 if married plus $500 per child). At those AGI benchmarks, payments begin to phase out at a 5 percent rate. The payments disappear entirely for individuals with AGIs above $99,000 ($198,000 for married couples).
What is a “resident alien”?
“Resident alien” is a tax term and does not refer to immigration status. Nonimmigrants who meet the substantial presence test, as defined by the Internal Revenue Service (IRS), are considered to be resident aliens. To meet the test, an individual needs to have been physically present in the United States on at least 31 days during the current year and 183 days during the 3-year period that includes the current year and the 2 years immediately before that. Individuals who are uncertain whether they are resident aliens should consult with an accountant or tax attorney.
How will the payment be calculated?
In determining the payment amount, the government will use income the individual reported to the IRS for the 2019 tax year (or 2018, if the 2019 return is not available). The CARES Act payment will not be considered income and will not be subject to taxes.
Will the payment be considered a “public benefit” or count negatively in the “public charge” analysis?
Probably not. In February 2020, USCIS began implementing a new rule limiting eligibility for immigration benefits for both nonimmigrants and immigrants who have received certain public benefits. The rule enumerates specific benefits and other factors to be considered in determining whether an individual may become a “public charge”; i.e., dependent on government assistance. The CARES cash payments – known as “recovery rebates” – did not exist at the time the rule was issued and thus are not included in the rule. In addition, immigration agencies that make public charge determinations have yet to speak officially about the impact of COVID-19 recovery rebates.
However, there is reason to hope that receiving a recovery rebate will not be held against either a nonimmigrant or an immigrant because the funds are to be reported on 2020 tax returns as a credit rather than as income. The public charge rule specifically says that another form of tax credit – subsidized health insurance under the ACA, known as a “premium tax credit” – is not a public benefit and is not weighed as a negative factor in the public charge analysis. However, having insurance that is partially paid for by the tax credit is not weighed as a “heavily positive” factor, as it would be if the insurance were paid solely from personal funds.
On the Form I-129 and Form I-539, nonimmigrants are required simply to check “yes” or “no” to whether they have received any of the banned public benefits on the enumerated list. The issue of whether they have received CARES recovery rebates is not likely to arise in these nonimmigrant processes. It may not arise in the green card context either. Although the rebate will appear as a credit on the tax return that immigrants must submit with their green card applications, there is no logical place for an applicant to list it on the new public charge form, Form I‑944. This is not the case for the ACA premium tax credit, which must be listed in the “Health Insurance” section of the form. The CARES rebate would not be listed under “Additional Income” because applicants are instructed to list only income they receive “on a continuing weekly, monthly or annual basis” there and the CARES rebate is a one-time payment. Although CARES recovery rebates may not be listed on the forms, immigration agencies may still be asking about them, but if so, they are only one factor in a multi-factor balancing test for the public charge determination.
Does CARES provide any other help for nonimmigrant workers?
Maybe. Nonimmigrant workers may be able to qualify for expanded unemployment insurance (UI) benefits under CARES, as well as under state laws and executive orders related to COVID-19. Nonimmigrant workers, whose authorization to work is tied to a specific employer, traditionally do not meet basic requirements for UI benefits because they are not “available to work” when that employer lays them off. However, CARES allocates $250 billion to expand UI, extend benefits through December 31, 2020, for eligible workers, make eligibility criteria more flexible, and offer workers an additional $600 per week for 4 months on top of what state programs pay. Many state programs, in turn, have relaxed their traditional “available to work” and “work search” requirements, either by law or by executive order. See Hunton’s HELP blog, States Follow Department of Labor Guidance for COVID-Related Unemployment Claims, and the “State and Local Executive Orders and Federal Guidance” page on Hunton’s Labor & Employment Pandemic Resource Center for details.
Will receiving unemployment benefits lead to a public charge finding?
No. As earned income rather than “cash assistance,” unemployment benefits are not counted as a negative factor in the public charge analysis. Form I-944 instructs applicants to list unemployment benefits under the “Additional Income” section.
To determine if you are eligible for a cash payment under the CARES Act or for UI benefits under state law, please seek qualified counsel.