As detailed in prior blog posts by our firm, the Coronavirus Aid, Relief, and Economic Security (CARES) Act provides a one-time direct payment of $1,200 to individuals earning less than $75,000 per year ($150,000 for couples who file jointly), including Social Security beneficiaries. The IRS has based the amount to be paid to an American based on the 2018 or 2019 tax return of the individual, whichever was the more recently filed return.

In the rush to get stimulus checks out to Americans who need them as quickly as possible, the IRS and Treasury Department made some mistakes along the way.  One of these mistakes has been sending checks to individuals that were deceased prior to the issuance of the payment.  Whether it was a check made out individually to the decedent, a direct deposit into a bank account or a joint payment with the widow or widower, families are questioning whether they may keep the money apportioned to the decedent or if they need to give it back to the government.

Recently there has been guidance issued on the topic, although it may not be what families were hoping.  The IRS has issued its position via its webpage for frequently asked questions relating to the stimulus payments:

The IRS states on this website that an individual who died prior to the receipt of the stimulus payment does not qualify and should not have received the payment.  The entire payment is to be returned to the IRS unless it was a joint payment with a living spouse.  In the case of a joint payment, half of the stimulus payment must be returned.

In the case of a paper check mailed to a deceased taxpayer, the check should be returned marked “VOID” along with a note detailing why the payment is being returned.  In the case of a direct deposit, jointly issued payment with a living spouse, or a check that has already been cashed, the family should write a check back to “U.S. Treasury” for the amount of the erroneous stimulus payment.  The family should write “2020EIP” and the social security number of the deceased individual on the memo line of the check.  A note should also be included with the check explaining the reason for the return.

There are specific addresses that a family should use to send back the erroneous payment.  In New York State, the family should use this IRS mailing address:

Brookhaven Refund Inquiry Unit

5000 Corporate Ct.

Mail Stop 547

Holtsville, NY 11742

If you have questions about the impacts of your stimulus payment on your family member’s estate, one of our attorneys can assist you. Please do not hesitate to contact the Wladis Law Firm. We will do our best to provide you with updates and will be available to answer questions as circumstances change. We may be reached at (315) 445-1700 or by reaching out to your everyday firm contacts.