Approximately 2.8 million deaths occur in the United States each year from all causes. This leads to an interesting dilemma with the stimulus payments/checks issued by the IRS. A small number of people are receiving checks for their relatives who are no longer with us. This is because in the rush to get stimulus checks out to the American people, the IRS used information from our 2019 and 2018 tax returns.
So, what should you do if you receive a stimulus check for a deceased family member?
- Keep it?
- Deposit it into an account held by the estate?
- Donate to charity?
- Something else?
- Or, heaven forbid, send it back?
The IRS says, send it back. The entire payment should be returned, unless it was made payable to joint filers and one spouse is still alive. In that case, only the portion of the payment made on account of the deceased person needs to be sent back. This amount will be $1,200, unless your joint adjusted gross income is more than $150,000.
In their “Frequently Asked Questions” on stimulus payments (technically called “economic impact payments” or EIP), the IRS outlined the procedures for returning a stimulus check issued to deceased persons. FAQ 41 available here.
If the payment was a paper check:
- Write “Void” in the endorsement section on the back of the check.
- Mail the voided Treasury check immediately to the appropriate IRS location listed below.
- Don’t staple, bend, or paper clip the check.
- Include a note stating the reason for returning the check.
If the payment was a paper check and you have cashed it, or if the payment was a direct deposit:
- For decedents from Michigan, submit a personal check, money order, etc., immediately to:
Kansas City Refund Inquiry Unit
333 W Pershing Rd.
Mail Stop 6800, N-2
Kansas City, MO 64108
- 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.
- Include a brief explanation of the reason for returning the EIP, such as the recipient died on X date.
This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions or comments.
We have created a response team to the rapidly changing COVID-19 situation and the law and guidance that follows, so we will continue to post any new developments. You can view our COVID-19 Response Page and additional resources by following the link here. In the meantime, if you have any questions, please contact your Fraser Trebilcock attorney.
Fraser Trebilcock attorney Paul V. McCord has more than 20 years of tax litigation experience, including serving as a clerk on the U.S. Tax Court and as a judge of the Michigan Tax Tribunal. Paul has represented clients before the IRS, Michigan Department of Treasury, other state revenue departments and local units of government. He can be contacted at 517.377.0861 or firstname.lastname@example.org.