Economic Impact Payments Issued to Deceased Taxpayers

Millions of Americans have already received their Economic Impact Payments (EIP) authorized by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The Internal Revenue Service (IRS) continues to automatically send the EIP to most eligible individuals. Many have received checks payable to taxpayers who died in 2018 or 2019 since payments were based upon either 2018  or 2019 Income Tax filings.

The question posed by our clients, as well as executors and administrators, is whether the asset should become part of deceased’s estate. On May 6, 2020, the IRS issued guidance on stimulus checks made to deceased taxpayers. If a check is made out to someone who died prior to receipt of the stimulus check, it should be returned to the IRS by following the instructions below. The entire EIP should be returned unless the check was made to joint filers and one spouse had not died before receipt of the payment. If this case, you only need to return the portion of the EIP made on account of the decedent. This amount will be $1,200 unless adjusted gross income exceeded $150,000.

If the EIP was made via a paper check, below are the instructions for returning the payment to the IRS:

  1. Write “Void” in the endorsement section on the back of the check.
  2. Mail the voided check immediately to the appropriate IRS location.
  3. Do not staple, bend, or paper clip the check.
  4. Include a note stating the reason for returning the check.

If the EIP was a paper check and you have cashed it, or if the EIP was a direct deposit, below are instructions for returning the payment to the IRS:

  1. Submit a personal check, money order, etc., immediately to the appropriate IRS location.
  2. Write on the check/money order made payable to “U.S. Treasury” and write 2020EIP, and the social security number of the recipient of the check.
  3. Include a brief explanation of the reason for returning the EIP (death of recipient)

The IRS location to return the EIP for taxpayers that resided in the State of New York is as follows:

Internal Revenue Service

Brookhaven Refund Inquiry Unit
5000 Corporate Ct.
Mail Stop 547
Holtsville, NY 11742

 

– Kera Reed, Esq.

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