The Internal Revenue Service (IRS) is now saying economic impact payments sent to deceased Americans must be returned, but how, exactly, do you return a coronavirus stimulus check that was sent to your late loved one; and what do you do if it has already been cashed? On Wednesday, the IRS issued new guidelines laying out the steps one should take to return money that was accidentally sent to those who are not eligible. The full details, along with address, can be viewed on the IRS' Economic Impact Payment Information Center.
According to the IRS, economic impact payments distributed to deceased Americans as well as though who are not actually eligible for one in the form of a paper check should be "immediately" returned to the IRS. "Voided" should be written in the endorsement section on the back of the check, which should not be staple, bent, or paper clipped, and a note should be included explaining the reason for returning the check. The voided check should then be mailed to the appropriate IRS location, which can be found by clicking here.
But what if you have already cashed the check or it was distributed via direct deposit? The IRS still expects the money to be returned. On its website, the agency instructs those finding themselves in this situation to "submit a personal check, money order, etc., immediately to the appropriate IRS location." You should write on the check or money order that it is made payable to the "U.S. Treasury." You should also write "2020EIP" as well as the taxpayer identification number (social security number, or individual taxpayer identification number) of the recipient of the check. A brief note stating the reason for returning the economic impact payment should also be included.
Ever since stimulus payments began going out in mid-April, Americans across the country have reported that their deceased loved ones have also received a check. While this likely has to do with the fact that the payouts are based on 2018 or 2019 tax filings, meaning that people who have since passed could still receive a check even though they are not eligible, confusion has swirled regarding whether or not the families of those Americans could keep the stimulus money. On Wednesday, however, the IRS finally gave a firm answer in new guidelines shared to its website, in which it stated that such checks should be returned "immediately."
Some legal experts have stated that the IRS does not have legal grounds to demand the return of stimulus money sent to deceased Americans, as the language used in the stimulus package does not allow the IRS to take back payments. At this time, the IRS has not clarified if there will be any legal consequences for those who fail to return the money.