Stimulus Checks Incorrectly Sent to Deceased People – What To Do Now?

The recently passed CARES Act included many provisions to provide economic aid, relief and stimulus for America. As a part of the new law many Americans will receive stimulus checks officially called Economic Impact Payments.

US citizens and permanent residents qualify to receive $1,200 for single and head of household filers, and $2,400 for married couple filer, with an adjusted gross income (AGI) up to $75,000 for individuals who file as single or married filing separately, $112,500 for head of household filers, and $150,000 for married couples filing joint returns. Reduced amounts will be sent to those who have a higher AGI. However, those with an AGI over $99,001 for single or married filing jointly, $136,501 for head of household, and $198,001 for married filing jointly, will not receive any money.

Recently, I have received calls from my clients who have received checks from the IRS that are written to family members who have died. And my clients want to know if they can keep the money. The answer is no.

The IRS has been incorrectly sending money to deceased individuals. The stimulus checks are only meant for people who are still alive. If you receive a check from the US Treasury payable to someone who is deceased, then you need to send back the entire payment. The exception is if the check is made to joint filers and a spouse is still alive. Then only a portion of the payment needs to be returned.

If you received a paper check, then write “Void” in the endorsement portion on the back of the check. The IRS requests that you include a note stating that you are returning the check because the person named on the check is deceased. Please do not staple or clip the note to the check, and don’t bend the check. Then send the voided check and note back to the IRS. If you live in Oregon or Washington, the address to use is Fresno IRS, 5045 E. Butler Ave., Fresno, CA 93888.

If you have already cashed the check, then send the IRS a cashiers check or money order for the same amount as deposited. The check should be made payable to the U.S. Treasury. And then on the memo line write 2020EIP and the deceased person’s social security number. Then follow the same procedures as addressed in the previous paragraph.

For more information, please see: https://www.irs.gov/coronavirus/economic-impact-payment-information-center#more

If you have more questions or want to talk about the CARES act or other estate planning issues, contact one of our estate planning attorneys.

Anastasia (Stacie) Yu Meisner is a member of the SYK Estate Planners practice. Her practice focuses on estate planning, mediation, probate, trust and estate administration. In addition, she also works with guardianships and conservatorships, as well as business transactions and formation.

Where’s My Stimulus Check?

The IRS sent out the first wave of stimulus payments this  past week to around 80 million Americans. In order to speed up the process, the IRS has prioritized sending payments to Americans that have previously submitted their direct deposit information with the agency. Those that have not authorized a direct deposit account with the IRS will receive their stimulus payment in paper check form. However, the IRS estimates that it only has the capacity to mail out 5 million checks a week, so many Americans will not receive their payment until likely August or later.

Based on the income level eligibility requirements, at least 90{45ef85514356201a9665f05d22c09675e96dde607afc20c57d108fe109b047b6} of Americans should qualify for at least some amount of stimulus payment. If you think you should have received your stimulus payment by now, here are several reasons why the IRS has delayed your payment.

Social Security Recipients

For recipients of Social Security and Supplemental Security Income (SSI), the IRS has announced that payments will appear alongside normal monthly benefits. Recipients are not required to file a tax return to receive payment and will receive their stimulus payment in the same format (direct deposit or paper check) of their normally received benefits.

Direct Deposit Not Authorized

Even if you filed your tax return electronically the last two years, the IRS may still not have direct deposit information saved for you. The IRS has only saved direct deposit information for those that have received a federal refund in 2018 and/or 2019. If you owed the IRS in either of those years, your direct deposit information may no longer be stored. The IRS is not using bank account information it used to withdraw from your account if you owed money. To check if you need to submit your direct deposit information, the IRS has set up a web portal for entering that information and checking on the status of your payment.

Change of Filing Status or Bank Account Information

Even if you received a refund and filed electronically, a change of filing status or a change in your direct deposit account could also delay your stimulus payment. For example, if you got married in 2019 and filed married jointly for the first time, or got divorced in 2019, and filed single for the first time in a while, the IRS may no longer have accurate direct deposit information on record. Similarly, if you changed banks or switched account numbers, the IRS will no longer have correct direct deposit information for you. Using the IRS Get My Payment Portal can verify if the IRS needs updated banking information.

Current Return Still Processing

Though the IRS extended filing of individual federal returns until July 15, 2020, many Americans still made efforts to file their 2019 returns in line with the normal April 15 due date. Due to the shutdown, the IRS has prioritized processing stimulus payments for Americans and has largely slowed down return processing for the next few weeks. Many service centers across the country have also closed entirely. If the IRS has receipt of your 2019 return but has not processed it yet, this may also delay your stimulus payment.

Non-filers

Millions of lower-income Americans who do not normally meet the income thresholds required for filing will need to also contact the IRS. Through use of a separate web portal entitled Non-Filers: Enter Payment Info Here, non-filers will need to confirm their identities and provide bank account information or address information to receive a stimulus payment.

Watch for Fraud

Remember that the IRS will never call you, email you, or otherwise contact you directly for your sensitive personal information. The IRS web portals will require you to enter information such as your social security number, your routing and bank account numbers, and other personal information. Otherwise this information should not be shared through any other method.

Nicholas Rogers - Attorney

Nicholas D. Rogers joins SYK Estate Planning and Taxation practice with a passion for helping individuals, small business and nonprofits. His practice includes a focus on estate planning, federal and state tax controversy, business formation and planning, as well as trust and estate administration.