updated 2:11 PM CET, Oct 31, 2023

U.S. CARES Act stimulus payments ‘not taxable as income in UK’

Americans who are tax-resident in the UK, and who have recently received Economic Impact Payments from the U.S. government (or who receive them in the weeks and months ahead), will not have to pay tax to HMRC, London-based U.S. tax expert David Treitel says.

David Treitel on CNN croppedTreitel, pictured left, founder and managing director of American Tax Returns Ltd, says he has been informed by HM Revenue & Customs, in answer to a question he posed, that “the Economic Impact Payments made under the CARES Act (Coronavirus Aid, Relief, and Economic Security Act of 2020), to eligible U.S. citizens and green card holders, are not taxable as income in the UK”.

“This is very exciting news for Americans who are living here,” Treitel told the American Expat Financial News Journal, noting that the basic amount most eligible American citizens will receive will be US$1,200 (unless they have an adjusted gross income of US$75,001 or more, in which case they will receive US$5 less for every US$100 they receive over US$75,000). And those with an adjusted gross income of more than US$99,000 don’t receive anything.

Married couples filing jointly  who don't exceed the adjusted gross income amounts will be getting US$2,400.

Expats with dependent children under the age of 17, meanwhile, may also receive an additional US$500 for each of them, under the one-off “stimulus payments” program, which, as reported, is part of a much larger US$2trn stimulus package that was signed into law by President Trump in March.

As reported here last year, the UK’s Office for National Statistics estimates there are around 120,000 to 156,000 U.S. citizens resident in the UK, based on 2018 data, giving it one of the largest concentrations of Americans outside the U.S. itself.

Treitel said he has not yet heard how, if at all, any of the other countries with large U.S. expat populations, such as Canada, Mexico, Israel and Germany, are planning to tax the stimulus payments received by their locally-tax-resident American citizens.