COVID-19 Update: Stimulus Payment and Unemployment Benefits

As per the report published by Congressional Research Service concerning Stimulus Payment and Unemployment Benefits.

STIMULUS PAYMENT: In order to receive Stimulus Payment, one must have social security number and must not be a “nonresident alien” for tax purposes. The CARES Act excludes “any nonresident alien individual” from eligibility for the stimulus payment. Under the Internal Revenue Code, “nonresident alien” means any alien who does not satisfy one of two criteria: (1) the alien is an LPR; or (2) the alien satisfies the “substantial presence” test. The IRS explains the substantial presence test as follows:

To meet the substantial presence test, one must be physically present in the United States (U.S.) on at least:

1. 31 days during the current year, and
2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
   All the days you were present in the current year, and
   • 1/3 of the days you were present in the first year before the current year, and

• 1/6 of the days you were present in the second year before the current year.

The substantial presence test has special rules for some aliens considered “exempt individuals,” such as nonimmigrant diplomats and students, and other aliens who demonstrate a closer connection to a foreign country. Aliens who do not have SSNs—including unlawfully present aliens who pay taxes using individual taxpayer identification numbers (ITINs)—are not eligible for the stimulus check.

UNEMPLOYMENT BENEFITS: As per the Federal Unemployment Tax Act (FUTA), aliens typically qualify for regular Unemployment Insurance benefits if they are authorized to work (both at the time they perform qualifying work and when they apply for and receive benefits). But a State can always establish stricter rules concerning the unemployment insurance.

The CARES Act establishes, among other provisions, federal funding for three major UI programs (Pandemic Unemployment Assistance, additional weeks of benefits, and additional $600 in federal weekly compensation). Such federal funding may trigger the restriction in 8 U.S.C. § 1611, a provision of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), which limits eligibility for “federal public benefits” to “qualified aliens”—a restrictive term that only covers certain groups enumerated in statute, such as LPRs, asylees, and refugees. If this restriction applies to the CARES Act programs, some categories of aliens who have work authorization and are generally eligible for regular Unemployment Insurance benefits would not qualify for them, Examples include DACA recipients, TPS holders, and many applicants for asylum.

Many holders of nonimmigrant work visas, such as H-1B visas for specialty occupations and L visas for intracompany transferees, such nonimmigrants would not be eligible for Unemployment Insurance Benefits, if Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) applies to benefits under the CARES Act, because they are not “qualified aliens.” But even under the baseline work-authorization requirement for regular Unemployment Insurance under Federal Unemployment Tax Act (FUTA), many nonimmigrant workers do not qualify in some states because they’re not considered “able and available to work” when they are unemployed. The terms of the visas authorize many nonimmigrant workers to work only for a single employer. Losing a job with that employer therefore means losing the work authorization. Even though H-1B and some other nonimmigrant workers have flexibility to change employers, federal law requires the new employer to file a new visa petition before the employee may work (and for some visa categories, the petition must be approved first). Thus, if a nonimmigrant worker has lost a job and does not have a new visa petition filed by a new employer, the worker is not “able and available” to work and does not qualify for benefits.

Please refer to our latest article on COVID-19. We will regularly update the blog as soon as any new information is available on COVID-19.

Previous Articles on COVID-19:

1. https://www.ahluwalialaw.com/covid-19-update-delays-in-extension-change-of-status-filings-and-filing-of-new-lcas-for-employees-working-from-home/ (Date of Publication: April 15, 2020)

Disclaimer

This article aims to provide new information concerning COVID-19 and its effect on the Aliens. This article, under no circumstances, acts as legal advice; therefore, for any further case-specific question, please contact your Attorney or the Ahluwalia Law Offices, P.C. (Team ALO).