Under “Scheme $6,000”, a sum of HK$6,000 will be given to each holder of a valid Hong Kong Permanent Identity Card (HKPIC) aged 18 or above. The eligibility date for “Scheme $6,000” is 31 March 2012. Anyone who is aged 18 or above and holds a valid HKPIC on that date meets the eligibility criteria of the Scheme.
Depending on their individual circumstances, eligible persons may register for the Scheme through banks or the Hong Kong Post from 28 August 2011 to 31 December 2012. Registrants confirmed to have met the eligibility criteria will receive payment.
Frequently Asked Questions for U.S. Citizens and U.S. Resident Aliens who are residents of Hong Kong and who qualify to receive the Hong Kong Scheme 6000 Payments
- Is a Hong Kong Scheme 6000 payment includible in a recipient’s gross income under U.S. tax laws?
Yes. A Hong Kong Scheme 6000 payment is includible in a recipient’s gross income under U.S. tax laws.
- Where on the Form 1040 should I report this income?
If a taxpayer is required to file a Form 1040 U.S. Federal Individual Income Tax Return, the taxpayer must report a Hong Kong Scheme 6000 payment as “other income” on line 21.
- Is a Hong Kong Scheme 6000 payment excludible from gross income under the section 911 foreign earned income exclusion?
No. A payment under Hong Kong Scheme 6000 is not “earned” income and thus, not eligible to be excluded under section 911.
- Is a Hong Kong Scheme 6000 payment excludible from gross income under the general welfare exclusion?
No. A Hong Kong Scheme 6000 payment is not a distribution based on need, and may not be excluded from gross income under the general welfare exclusion.
- Is a Hong Kong Scheme 6000 payment excludible from gross income as a gift?
No. A Hong Kong Scheme 6000 payment is not a gift. The payment is a distribution of wealth based solely on residency. There is nothing to indicate that the Hong Kong government intended these payments to be gifts.
- Does the income tax treaty between the United States and the Peoples Republic of China affect the U.S. taxation of the Hong Kong Scheme 6000 payments?
No. The U.S. Internal Revenue Service has announced in Notice 97-40 that it will
continue to treat China and Hong Kong as separate countries for purposes of the U.S. China Tax Convention. Because Chinese tax laws will not apply in Hong Kong following the takeover of Hong Kong by P.R. China, the U.S. Internal Revenue Service says it will not apply the terms of the U.S.-China Tax Convention to Hong Kong.