Citizens of freely associated states who are living in a U.S. territory are entitled to economic impact payments, which will come from the local tax agency of the host jurisdiction, according to the Internal Revenue Service.
For Guam, this means the Department of Revenue and Taxation will have to share with FAS citizens the island's windfall of $134 million in EIP funds received from the federal government through President Trump's Coronavirus Aid Relief and Economic Security Act, also known as CARES Act.
As of June 4, DRT has processed 66,300 EIP Program payments totaling about $121.98 million. This represents about 90 percent of the amount approved by IRS and U.S. Treasury.
Under the Compacts of Free Association, citizens of Palau, Federated States of Micronesia and Republic of Marshall Islands are allowed free entry into any U.S. jurisdiction and may avail of social services provided by the local government.
According to the Census Bureau’s report in March 2019, Guam was home to 18,874 FAS migrants, accounting for 11 percent of the island’s total population.
Although FAS governments are among the beneficiaries of other Covid-19 relief programs under CARES Act, the EIP component of the law does not extend to their citizens, David A. Tucker II, spokesman for IRS said.
The EIP program awards American households direct cash assistance up to $1,200 per adult for individuals whose income was less than $99,000 (or $198,000 for joint filers) and $500 per child under 17 years old – or up to $3,400 for a family of four.
"Citizenship or residency status in the freely associated states, by itself, does not entitle you to a payment. However, if you are a resident of a U.S. territory for the tax year 2020 for U.S. territory income tax purposes, you can be eligible for a payment from the U.S. territory tax agency," Tucker said in a Q&A posted on the IRS website.
Tucker advised FAS citizens to consult with the local tax agency to determine whether they are eligible for a payment. "Alternatively," he added, "if you are not a resident of a U.S. territory for the tax year 2020 but you are a U.S. citizen or U.S. resident for federal income tax purposes, you may be eligible for a payment from the IRS."
But an individual may receive only a single payment, Tucker said.
"In general, eligible individuals should not receive a payment from both the IRS and a U.S. territory tax agency. If you have received a payment from more than one jurisdiction and you are a resident of a U.S. territory for the 2020 tax year, please consult your U.S. territory tax agency concerning information about payments received by U.S. territory residents from the IRS, including incorrect or duplicate payments.
"If you have received a payment from more than one jurisdiction and you are a NOT a resident of a U.S. territory for the 2020 tax year, you should return any incorrect or duplicate Payments received from the U.S. territory tax agency to the IRS pursuant to the instructions about repayments."
In April, Palau, FSM and Marshall Islands received their share from $55 million in emergency relief funding divided among FAS and U.S. territories to prepare, prevent, and respond to the coronavirus disease 2019 (COVID-19) pandemic.