There have been many reports of deceased taxpayers receiving Federal Economic Impact Payments (“stimulus checks.”)  In a rush to get payments out, some payments were sent to people who had passed away.  Unfortunately, the Internal Revenue Service did not cross-reference the Social Security Administration’s database to determine whether a taxpayer was deceased before sending payments, causing increased confusion for many.

The Treasury Department issued guidance on Wednesday, May 6, 2020, saying payments made to deceased taxpayers must be returned to the IRS.  The entire payment must be returned if the taxpayer died before receipt of the payment. The only exception to this rule is if the payment was made to joint filers and one spouse is still living upon receipt of the payment. In that case, only one-half of the payment is required to be returned.

If you received payment on behalf of a deceased taxpayer, here is what you should do:

If the payment was a paper check:

1. Write “VOID” in the endorsement section on the back of the check.
2. Mail the voided check immediately to the applicable IRS location as indicated in the A41 of IRS guidance issued May 6, 2020 (available here.) For New York recipients, that location is:

Brookhaven Refund Inquiry Unit
5000 Corporate Court
Mail Stop 547
Holtsville, NY 11742

3. Do not staple, bend or paper clip the check.
4. Include a note stating the check is being returned because the taxpayer is deceased.

If the payment was a paper check and you cashed it, or if the payment was a direct deposit, then follow these procedures:

1. Submit a personal check or money order to the appropriate IRS location (see above).
2. Make the check/money order payable to the “U.S. Treasury” and write “2020EIP”, and the taxpayer identification number (social security number or individual taxpayer identification number) of the recipient on the check.
3. Include a note stating that the payment is being made to return a stimulus payment made to a deceased taxpayer.

We suggest that you use certified mail and keep copies of any check or correspondence sent to the IRS as a record that the payment was returned.

Visit our COVID-19 resource page for other information regarding the pandemic.

This alert does not purport to be a substitute for advice of counsel on specific matters.

Harris Beach has offices throughout New York State, including Albany, Buffalo, Ithaca, Long Island, New York City, Rochester, Saratoga Springs, Syracuse and White Plains, as well as New Haven, Connecticut and Newark, New Jersey.