When the IRS started sending out stimulus payments of $1,200 per taxpayer, it lacked the safeguards in place to ensure payments did not go to deceased taxpayers. This is not the first time that this has happened. Back in 2008 with the recession dawning on America, the IRS sent out stimulus checks of $600 per taxpayer that filed a return in 2007 including deceased taxpayers. Then the IRS said the deceased taxpayer’s family could keep the checks. Fast forward to 2020 and the IRS has said “not so fast”.
In guidance released May 6th, the IRS has said the $1,200 stimulus payments this time must be returned to the IRS by the deceased taxpayer’s family. This is direct contradiction to the language of the CARES act with stated that taxpayers can keep the extra funds they receive if their stimulus check is too large.
If you received a stimulus check for a deceased taxpayer by mail, the check should be voided and mailed back to the IRS. If the payment was received by direct deposit, the taxpayer should write a check to the government. 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. A explanation for why the payment is being returned should be included with the check. If you live in NYS you should mail the payment back to Brookhaven Refund Inquiry Unit, 5000 Corporate Ct., Mail Stop 547, Holtsville, NY 11742. A complete list of addresses for other states can be found at https://www.irs.gov/coronavirus/economic-impact-payment-information-center#more
If you have any questions feel free to reach out to any of our professionals for more information.