Under the CARES Act, two types of benefits are covered: first, so-called “Recovery Rebates”, and, second, Unemployment Insurance payments that supplement existing state UI benefits.
A. Recovery rebates.
These rebates are set at $1200 for each eligible taxpayer, and $500 per eligible child. Although these benefits are defined as tax credits, the law includes an “advancing” provision, so IRS is sending these payments during the 2020 calendar year, instead of making recipients wait and request the credit in 2021 when filing the 2020 Federal Tax Return.
There are two main requirements for a person to be eligible for such a rebate:
1. The person must have an SS number that is given to individuals who are able to work in the US (some SS numbers are provided to allow people to access certain benefits, but those SS numbers are given to people who cannot obtain work authorization); and
2. The person must not be a “nonresident alien” for IRS tax purposes. NOTE: this term has a different meaning under tax law than it does under immigration law.
a. To show that a person is not a nonresident alien for tax purposes, the person must show that he satisfies one of the following definitions:
i. He is a US Legal Permanent Resident (“LPR” , i.e., he has a green card); or
ii. He meets the “substantial presence test”, which very generally means the individual has resided in the US for at least
1. 31 days in the current tax calendar year; and
2. 183 days during the last three years.
The actual definition is more complex, and tax advice should be accessed to make a proper determination.
Summary: Therefore, to be eligible for these recovery rebates, a person must be able to show that
1. He has a work-based SS number; AND
2. He is not a nonresident alien for tax purposes, by showing either
a. He is an LPR; OR
b. He can satisfy the substantial presence test.
B. Unemployment Insurance (“UI”) Benefits
UI benefits normally are governed by state law rules, although some federal laws can impact eligibility.
1. Eligibility under State Law
Whether an employee can receive state unemployment benefits initially requires an analysis of state law.
In North Carolina, the employee seeking benefits proves eligibility by showing two things: that she is able to work, and available to work. Where the employee has H-1B status, she also would have to show that she remains in valid immigration status (e.g., has been furloughed as opposed to having been terminated). The Tips that now appear on the North Carolina DES website confirm that an employee who cannot work because of the COVID-19 outbreak is considered to be both able and available to work, as long as the employee has not removed herself from the labor market. The Tips do not address immigration status, but a foreign national would have to show she has valid immigration status and work permission, to show ability to work.
In California, an employee must prove that she
a. was in satisfactory immigration status and authorized to work in the US when earning the wages she used to establish her claim; and
b. currently is in satisfactory immigration status, and is authorized to work for each week that she claims benefits.
Regardless of which state rules apply, the employee seeking unemployment benefits must comply with all of those rules and be sure that she can prove eligibility before applying for those benefits.
2. Effect of termination
If an H-1B employee is terminated, she would be authorized to work during the 60 day grace period, but probably not afterward. A nonimmigrant with a different kind of work visas might not have the ability to show work authorization if she is terminated, although USCIS may issue guidance that would assist the nonimmigrant in that context, too. However, if the H-1B employee is simply furloughed, both during and after the 60 day period she should be considered authorized to work for purposes of California claims, and “available to work” for North Carolina claims.
3. Receipt of Unemployment benefits and the Public Charge rules
The foreign national employee also will need to know if she should even request those benefits.
USCIS recently issued a new group of rules related to whether a prospective immigrant is likely to become a “public charge”; if the answer is yes, that person’s visa application or green card case can be denied. The rules list a number of positive and negative factors related to this issue. It also lists benefits that are not considered “public benefits” (which could lead to a finding of public charge), and that list contains Unemployment Benefits.
As a result, the receipt of unemployment benefits (at least under the current version of the USCIS public charge rules), would not have a negative impact on that person’s visa application or green card case.
C. Additional CARES Act UI Benefits and Applicable Requirements
The CARES Act also created some additional Unemployment Insurance benefits, i.e., ones that are in addition to existing state benefits. The additional federal funding includes three types of new UI programs (Pandemic Unemployment Insurance, thirteen (13) additional weeks of benefits, and additional $600 weekly compensation).
To qualify for those additional UI benefits, a person must prove the following:
- The person was authorized to work when he performed the qualifying work;
- The person is authorized to work when he applies for the UI benefits; and
- He is actively seeking employment (note: this requirement has been suspended in many states, e.g., North Carolina, so to that extent the issue becomes a question of work authorization).
D. “Qualified aliens” under the CARES Act
Under other provisions of law, certain applicants must meet the definition of a “qualified alien” to access benefits. We do not know if the CARES Act will trigger this provision that requires a person to be a “qualified alien”, but it could. If it does, the only individuals (other than US citizens) who will be eligible to receive these additional benefits will be LPRs, asylees and refugees. It will disqualify people who have DACA, PTS and many applicants for asylum, as well as all nonimmigrants.
The law is not clear at this point, so guidance from the Department of Labor is critical, and we hope, will be forthcoming soon.
Individuals in the US with work visas face these issues, too. If the “qualified alien” requirement applies, they will be disqualified from the above 3 types of CARES Act benefits. In addition, even if that rule does not apply, the question remains: are they available for work? As noted above, in North Carolina, the Tips guidance provides that they are considered available for work. However, until we have new guidance on the “qualified alien” issue, we do not know if nonimmigrants will qualify for the new CARES Act supplemental benefits.
Gerard M. Chapman
Board Certified Immigration Law Specialist
Chapman Law Firm
As amended April 10, 2020, and April 20, 2020
About the author: Mr. Chapman has practiced immigration law since 1987, and has been a NC Board Certified Immigration Law Specialist since 1997. He is the principal of Chapman Law Firm in Greensboro, a firm that represents employers in every kind of employment based immigration matters before USCIS, DOL and DOS. The firm also offers related services such as I-9 audits and consultations regarding possible options for essential employees. He can be reached by phone at (336) 334-0034 or by email at email@example.com.