What do you do if you receive a COVID-19 stimulus check from the IRS for your deceased loved one?
Many people have received stimulus checks or direct deposits which were 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 with the stimulus checks and direct deposit payments made payable to deceased persons.
Initially, there was no answer to this question, but on May 6, 2020, the IRS answered the question on their website found here under Q10 stating that “[a] Payment made to someone who died before receipt of the Payment should be returned to the IRS.” The entire payment should be returned to the IRS unless the stimulus check was made to joint tax filers. In that case the IRS says that “you only need to return the portion of the Payment made on account of the decedent.”
How do you return the stimulus check or payment made on account of 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 check should be voided and returned to the IRS location provided on the IRS website, which can be found under Q41 here. You should include an explanation that you are returning the check because the payment was issued to a deceased person.
If you have already deposited a paper check or if the payment was made by direct deposit, the IRS says to write a personal check or money order made payable to the “U.S. Treasury” and include the social security number of the deceased person and “2020EIP.” You should also include an explanation that you are returning the payment 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 under Q41 here.
What if the check is made payable to joint tax filers and one tax 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 check 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 found under Q41 here.
What if your deceased loved one has other assets or accounts held in their individual 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. Our office 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.