As millions of Americans begin receiving their Economic Impact Payments (or “stimulus payments”) authorized by The Coronavirus Aid, Relief, and Economic Security Act, many of our clients are asking this question: What should they do if they receive a stimulus payment issued to a deceased family member?
While the IRS did not initially address this contingency when it began distributing stimulus payments based on 2018 and 2019 tax return information, recent guidelines have been published on the IRS’s website directing that such payments be returned, and providing instructions on the return process.
According to the guidelines, which can be found on the IRS’s online “Economic Impact Payment Information Center," a payment issued to an individual who has passed away should be returned, with one exception. If the payment was issued to joint filers and one spouse passed away before receipt of the payment, then the surviving spouse can keep his or her portion of the payment and return only the portion paid to the deceased spouse.
Instructions on how to calculate a deceased spouse’s portion and how to properly return payments to the IRS have also been published. Those instructions and additional guidelines relating to IRS stimulus payments can be found here: https://www.irs.gov/coronavirus/economic-impact-payment-information-center.
Please contact a member of our firm if you have questions or need further information.