Author: Ashley M. Securda, Esq., Partner
I have received many phone calls from clients regarding a loved one who passed away in either 2018 or 2019, yet they have received an economic impact payment (“EIP”) as authorized by the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The question is whether or not a person who had passed away prior to receipt of the stimulus check is entitled to keep the funds. Prior to today, the law was unclear on this topic. The IRS has now issued guidance answering this question. As per the IRS’s website which was just updated today, May 6, 2020, if a person dies before receiving the stimulus payment, he or she is not entitled to keep the funds.
What if you have already received a paper check and you cashed it or if the payment was directly deposited into the account of the deceased individual?
There are instructions on the website which explain how to return any payment received. If you received a paper check, you should write “void” across the check and send the check back to the appropriate IRS location based on the last known address of the decedent (for more information on where to send a voided stimulus check, please visit the IRS website found here: https://www.irs.gov/coronavirus/economic-impact-payment-information-center#more).
If you have already cashed a check on behalf of a deceased individual, or if the payment was directly deposited into a deceased person’s account after they passed away, you should immediately submit a check or money order for the exact amount of the stimulus payment received. The check should be made payable to the “U.S. Treasury” and you should write “2020EIP” and the taxpayer identification number or social security number in the memo section of the check. The IRS is also asking you to include a brief explanation of the reason for returning the payment. Simply indicating the taxpayer’s date of death should be sufficient.
In addition, also added today to the IRS website is the answer to whether or not a person that is a non-resident alien or an individual that is incarcerated qualifies for the payment. The answer to both questions is no. For more information, please see the IRS’s website located here: https://www.irs.gov/coronavirus/economic-impact-payment-information-center#more