Many people have received a stimulus check or direct deposit which was authorized through the CARES Act (Coronavirus Aid, Relief, and Economic Securities Act). The IRS issued payments automatically to individuals who filed taxes in 2018 and 2019. Some of those tax filers are now deceased, which leaves many wondering what to do if they received a stimulus check for a deceased person. This is an important question as CNBC reported that over $1.4 billion in stimulus money was sent out by the federal government to “dead people”.
Initially, there was no answer about whether people who received the payment must return the money, but on May 6, 2020, the IRS answered the question on their website found here: unless the filers were joint and one spouse is living, the entire stimulus payment should be returned to the IRS. The page also states that the surviving spouse also has the right to return the paper check if they are unable to cash it because the name of their deceased spouse is on it. The IRS will reissue the stimulus money in the name of the surviving spouse. The IRS further encourages the public to share the information with their friends and family.
Returning the Check for a Deceased Person
There were a reported 1.1 million stimulus payments sent out by the federal government to deceased individuals that must be returned to the IRS. If you received a stimulus check for a deceased person, the IRS has provided instructions on returning the stimulus checks or payments.
If the payment was made by a paper check, the payment should be returned in a certain way. First, you must write “void” on the check. Then, you must return the check to the IRS location provided on the IRS website, which can be specifically located on their Economic Impact Payment Information Center page. Then, choose Topic I. From there, the top question can expand into a dropdown. You can then read the list carefully to find your state in the left column. The right column will tell you which IRS location you should use. You should include an explanation that you are returning the stimulus check because the payment was issued to a deceased individual. Remember that if the stimulus payment was issued to you and the deceased person because you filed jointly, you are not required to return the entire payment. You can request the IRS to reissue the stimulus check for your portion in only your name.
If you have already deposited a paper check or if the payment was made by direct deposit, the IRS states that you must provide a check or money order made payable to the “U.S. Treasury Department” and include the social security number of the deceased person along with “2020EIP.” You should also include an explanation that you are returning the stimulus money because the recipient was deceased when the payment was issued. Your check or money order should be mailed to the IRS location provided on the IRS website, found as explained above. Remember to look carefully for your state to ensure that you return the payment to the proper IRS location.
What If the Check is Made Payable to Joint Filers and One Filer is Deceased?
A paper check made payable to joint tax filers with one tax filer being deceased presents an issue that has not yet been resolved by the IRS. It is unlikely that a bank will deposit a stimulus payment if the check is made payable to a deceased person. A portion of the stimulus payment is on account of the deceased person, but a portion of the payment is also on account of the surviving joint filer and that person should be entitled to a portion of the stimulus payment. Since there is no guidance from the IRS at this time for this situation, the safest answer would be to void the check and return it to the IRS with a letter explaining one joint filer is deceased, providing the social security number of the deceased joint filer and requesting the IRS reissue a stimulus payment for the portion due to the surviving tax filer. The check should be returned to the IRS location provided on the IRS website, which can be located on their Economic Impact Payment Information Center page.
What If Your Deceased Loved One Has Other Assets or Accounts Held in Their Name?
If a person dies leaving assets that are held just in the deceased person’s name, with no beneficiary, a probate of the deceased person’s estate may be necessary. Ball Morse Lowe has attorneys experienced in the probate process who can guide you through handling your loved one’s estate. More information about our probate services can be found here.