Economic Impact Payments Sent to Deceased Taxpayers – IRS Wants Its Money Back…

When Congress passed the Coronavirus Aid, Relief and Economic Security Act (CARES Act), it provided for economic impact payments of up to $1,200 per person be sent to taxpayers. When the Internal Revenue Service (IRS) issued those payments, it referred back to a taxpayer’s 2018/2019 income tax returns to see if a particular individual qualified based on their gross income in those years. One important fact was overlooked – whether the individual was still alive when the economic impact payment was issued. The IRS has now provided guidance if a deceased individual received a payment – basically, the IRS wants its money back.

On May 6, 2020, the IRS updated its Question & Answer section that relates to economic impact payments on its website to address this issue. Specifically, questions #10 and #41 were updated to address what should be done. Pertinent information from Question #10 and Question #41 is shown below along with a link for additional details on how to return the payment.

Q10. Does someone who has died qualify for the Payment? (added May 6, 2020)

A10. No. A Payment made to someone who died before receipt of the Payment should be returned to the IRS by following the instructions in the Q&A about repayments. Return the entire Payment unless the Payment was made to joint filers and one spouse had not died before receipt of the Payment, in which case, you only need to return the portion of the Payment made on account of the decedent. This amount will be $1,200 unless adjusted gross income exceeded $150,000.

Q41. What should I do to return an Economic Impact Payment (EIP)? (added May 6, 2020)

A41. You should return the payment as described below.

If the payment was a paper check:

• Write “Void” in the endorsement section on the back of the check.
• Mail the voided Treasury check immediately to the appropriate IRS location listed below.
• Don’t staple, bend, or paper clip the check.
• Include a note stating the reason for returning the check.

If the payment was a paper check and you have cashed it, or if the payment was a direct deposit:

• Submit a personal check, money order, etc., immediately to the appropriate IRS location listed below.
• Write on the check/money order made payable to “U.S. Treasury” and write 2020EIP, and the taxpayer identification number (social security number, or individual taxpayer identification number) of the recipient of the check.
• Include a brief explanation of the reason for returning the EIP.

Mailing addresses for returning checks can be found at this link under Question #41 – https://www.irs.gov/coronavirus/economic-impact-payment-information-center