Stimulus Checks: Payments Sent out to Deceased Americans Must Be Returned, Says IRS

Coronavirus stimulus checks sent to deceased Americans must be returned, the Internal Revenue Service (IRS) now says. In new guidelines issued Wednesday, the IRS addressed the growing number of Americans reporting that their deceased loved ones had received payments, clearing up the surmounting confusion regarding whether or not families are allowed to keep those payments. The clarification came in updated segments on the IRS' Economic Impact Payment Information Center, where a question now reads, "Does someone who has died qualify for the payment."

"No. A Payment made to someone who died before receipt of the Payment should be returned to the IRS by following the instructions in the Q&A about repayments," it reads. "Return the entire Payment unless the Payment was made to joint filers and one spouse had not died before receipt of the Payment, in which case, you only need to return the portion of the Payment made on account of the decedent. This amount will be $1,200 unless adjusted gross income exceeded $150,000."

For those Americans whose loved ones have received stimulus payments in the form of a paper check, the IRS says that "void" should be written in the endorsement section on the back of the check. The check should not be stapled, bent, or paper clipped and a note should be included stating the reason for returning the check. The check, the IRS says, should be mailed back "immediately." A list of addresses is listed on the IRS site.

For those who have already cashed the paper check or if the payment came via direct deposit, the IRS says to "immediately" send personal check or money order to the IRS. The personal check or money order should be made payable to "U.S. Treasury," with "2020EIP" written on the check or money order and taxpayer identification number (social security number, or individual taxpayer identification number) of the recipient of the check also included. A brief explanation of why the money is being returned should also be sent.

The IRS did not, however, say if there would be legal consequences for those who fail to return the money. Citing law experts, the Los Angeles Times previously reported that the language used in the stimulus package does not allow the IRS to take back payments. Nina Olson, former head of the Taxpayer Advocate Service, said that beneficiaries of the deceased are legally allowed to keep the money.