Turns Out, You Can't Take It With You

Murtha Cullina

The Coronavirus Aid Relief and Economic Security Act (CARES Act) included economic impact payments (also sometimes referred to as “stimulus payments”) for qualifying individuals of up to $1,200 per person.  The payment is automatic for most taxpayers and based in part on the individual’s filed tax return for 2018 or 2019.  In April more than $200 billion in economic impact payments were sent out by the Treasury, and some of those payments were mailed to or deposited into accounts for persons who died between 2018 through 2020.  

On May 6, 2020, the Treasury Department released guidance on whether someone who has died qualifies for the payment on its website stating that someone who died before the receipt of the payment does not qualify to receive the payment and the entire payment should be returned to the IRS. The administration does not differentiate between people who died in 2018, 2019, or 2020.  The entire amount should be returned unless payment was made to joint filers and one spouse had not died before receipt of payment, in which case, only the portion made on account of the decedent should be returned.  

On May 11, 2020 the Treasury Department released further guidance regarding how to return economic impact payments sent to deceased individuals.  

If a paper check was received, write in "VOID" on the back of the check in the endorsement section, mail it to the Treasury Department at the appropriate address below, and include a note stating the reason the check is being returned.  

If a paper check was cashed or payment was received by direct deposit, submit a personal check or money order to the IRS, made payable to US Treasury, include “2020 EIP” in the notes section with decedent’s Social Security number, and include a note stating the reason the check is being sent.

For taxpayers in CT:      
Kansas City IRS
333 W. Pershing Road
Kansas City, MO 64108

For taxpayers in MA:    
Andover IRS
310 Lowell Street
Andover, MA 01810

For taxpayers in NY:    
Brookhaven IRS
500 Corporate Court
Holtsville, NY 11742

Treasury has not commented on whether there is any penalty for not returning checks and has not commented on how it plans to enforce the guidelines.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Murtha Cullina

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