As many Americans receive their $1,200 stimulus checks from the federal government to help offset the impacts of the coronavirus pandemic, some people were surprised to discover that their dead family members were also sent funds. Many people took to Twitter to wonder about what that meant for them and if they would have to return the money eventually.
"Ok this is insane, but just the tip of the iceberg," tweeted Rep. Thomas Massie, R-Kentucky, who shared an image of a text from a friend that read, "Dad got his stimulus check of $1,200. He died in 2018. Does he have time to spend it online?" Financial adviser Scott Salaske tweeted that the deceased spouse of one of his acquaintances also received a stimulus check. "Is the government that desperate for people to spend money?" Salaske wrote. Another Twitter user said her mother received a $2,400 deposit and assumed that was because her father died. "Does anyone know how this will be handled?" the user asked. "Seems like they will want $1200 back."
Deceased people are receiving stimulus checks today.
My grandmother passed away in 2018 — and $1,200 was deposited in her bank account today. pic.twitter.com/XkhyiGxBgj— Scott Gustin (@ScottGustin) April 15, 2020
But it appears as if those whose deceased family members received a stimulus check do not have to worry about paying back the federal government. Nina Olson, the founder of the Center for Taxpayer Rights and former taxpayer advocate for the IRS, told USA Today that because the payments are based on taxpayers' 2019 returns — or 2018 if they have not yet filed — people whose spouses died in those years would be eligible for a payment.
Olson also said that under the CARES Act (Coronavirus Aid, Relief and Economic Security Act), the massive $2.2. trillion stimulus plan that activated the payments, someone who gets more money than they have been entitled to cannot have their credit reduced "below zero" when they file their 2020 return. In other words, they would not have to repay the $1,200 when they filed in 2020.
Similarly, because a person is eligible to file jointly the year their spouse died, they would also receive a payment for their dead spouse. "That was really consciously written into the law," Olson said. "It's rough justice. They're using the data that's available to get money into the system. They know in advance that some payments will go out that shouldn't go out."
Senate Finance Committee Chairman Chuck Grassley's office said the matter is being investigated. Malcolm Sparrow, who was appointed by former President Barack Obama in 2010 to serve on a panel to oversee the American Recovery and Reinvestment Act after the 2008 financial crisis, said, "The American government paying money out to dead people, or to dead patients, or dead welfare beneficiaries is years and years old." He explained that payments may happen because of outdated government data. "So that's one potential explanation: that it's just out of date or inaccurate death records being transferred from one agency to another."
But officially, it's not immediately clear what will happen with those receiving checks for deceased relatives during the coronavirus crisis. As of Thursday morning, the IRS did not have guidelines on its website for payments sent in error to the deceased.