u.s. expat tax guide – chile
Can US citizens in Chile still get a stimulus payment?
US citizens and Green Card holders living in Chile may still be able to claim the third stimulus payment of US$1,400 per person.
This payment was provided under the COVID-19 relief programs and is based on income limits. To receive it, you must file a 2021 US tax return before April 18, 2025.
Who is eligible for the third stimulus payment?
- Single filers: AGI must be US$75,000 or less for the full payment (phases out at US$80,000).
- Married filing jointly: AGI must be US$150,000 or less (phases out at US$160,000).
- Head of household: AGI must be US$112,500 or less (phases out at US$120,000).
- Dependents: Each qualifying dependent may add US$1,400 to your payment.
If your income was too high in 2020 but dropped within limits in 2021, you can still qualify by filing a 2021 tax return.
Can expats still claim the first two stimulus payments?
No, the deadline to claim the first two payments (from 2020) passed in May 2024. However, the third stimulus payment is still available if you file a 2021 tax return before April 18, 2025.
What if you haven’t filed taxes for several years?
If you’ve been living in Chile and haven’t filed US taxes, you may qualify for the Streamlined Foreign Offshore Procedure, which allows expats to catch up without penalties:
- File the last three years of tax returns (typically 2021, 2022, and 2023).
- Submit FBARs for the past six years (if foreign bank accounts exceeded US$10,000).
- Provide a signed statement explaining why you failed to file on time.
This program can help expats regain compliance and claim the third stimulus payment if eligible.
Who was eligible for US stimulus payments?
US expats could receive stimulus checks if they met specific requirements related to income, tax status, and residency.
Eligibility Requirements:
- US Citizen or Green Card Holder: Only US citizens, Green Card holders, and some resident aliens qualified. Non-resident aliens were not eligible.
- Social Security Number (SSN): A valid SSN was required for both the filer and any dependents.
- Income Limits: Payments phased out for individuals earning over US$75,000 (single), US$150,000 (married filing jointly), or US$112,500 (head of household).
- Not a Dependent: If someone else claimed you as a dependent, you couldn’t receive a stimulus check.
How will expats receive the stimulus payment?
- Direct deposit – Fastest option if a US bank account is on file.
- Paper check – Mailed to the address on your tax return (can take weeks to arrive).
- EIP debit card – Some recipients may receive their payment on a prepaid card.
Expats without a US bank account may experience delays.
What if you didn’t receive the payment or got the wrong amount?
Expats who never received their stimulus payment or received less than expected can claim the Recovery Rebate Credit on their 2021 tax return.
Steps to claim the Recovery Rebate Credit:
- File a 2021 tax return (Form 1040) and include the Recovery Rebate Credit.
- Use the IRS Get My Payment Tool to track the status of your payment.
- Request a payment trace if the IRS claims it sent a payment that was never received.
If your income was too high in 2020, but dropped below the limit in 2021, you can claim the missing amount when filing your 2021 tax return.
Does the US-Chile tax treaty affect stimulus payments?
No, stimulus payments are not affected by tax treaties. The payments are based on US tax filings, not foreign tax rules. However, because the US taxes its citizens worldwide, you must file a US tax return even if you already pay taxes in Chile.
The savings clause in most tax treaties allows the US to continue taxing its citizens, which means you must file to receive your stimulus payment.
How can expats avoid delays in receiving payments?
- Stay compliant with tax filings – File yearly tax returns, even if you owe nothing.
- Ensure IRS records are up to date – Keep your bank details and mailing address current.
- Verify Social Security details – Ensure your SSN records are correct, especially if you receive Social Security benefits.
What if an expat files jointly with a non-US citizen spouse?
If you are married to a non-US citizen, you can still receive the stimulus payment if you file Married Filing Separately and meet the income thresholds. However, if you file Married Filing Jointly, your spouse must have a Social Security Number (SSN) to qualify for the payment.
If your spouse does not have an SSN, your best option is to file separately to ensure eligibility for your own stimulus payment.
Are there any other benefits expats should know about?
Expats filing late tax returns can also check if they qualify for:
- Child Tax Credit (CTC): If you have dependents, you may be eligible for up to US$3,600 per child under the expanded 2021 credit.
- Earned Income Tax Credit (EITC): If your income is low to moderate, this credit could provide additional tax relief.
How did US expats benefit from stimulus payments?
The US government provided financial relief through stimulus payments under the CARES Act (2020) and the American Rescue Plan Act (2021). These payments were available to eligible US citizens, including those living abroad.
- CARES Act: Sent US$1,200 per adult and US$500 per qualifying child in 2020.
- Consolidated Appropriations Act: Provided a second round of US$600 per adult and US$600 per child in late 2020.
- American Rescue Plan Act: Issued a third payment of US$1,400 per adult and US$1,400 per dependent in 2021.
What are some common problems US expats face when claiming stimulus payments?
- Outdated IRS Records: If your mailing address or bank details are not up to date, your payment could be delayed or sent to the wrong place.
- Filing Status Confusion: If you are married to a non-US citizen, filing jointly may cause issues. Filing separately is often a better option.
- Banking Issues: Expats without a US bank account may experience longer wait times for checks or debit card payments.
- Missed Tax Filings: If you haven’t filed taxes for years, you may need to catch up using the Streamlined Filing Compliance Procedures before claiming your payment.
Working with an expat tax specialist is recommended to avoid these issues and ensure timely payments.
What steps should expats in Chile take now?
- File your 2021 tax return before April 18, 2025, to claim the US$1,400 stimulus payment.
- Consult a tax professional to ensure proper filing and avoid penalties.
- Use the Streamlined Foreign Offshore Procedure if behind on taxes, as it provides a penalty-free way to catch up.
