Decedents Receiving COVID-19 Stimulus Checks

The Internal Revenue Service has begun its process for distributing “coronavirus relief” or “stimulus checks” over the past week. The system is not flawless and some people have realized that some of these payments are being deposited into a deceased person’s account.

A decedent’s account does not qualify as an “Eligible Individual” for these purposes.

Section 6428 of the CARES Act provides that an "'ELIGIBLE INDIVIDUAL' means any individual other than -- ...an estate or trust". This means that if you are an executor, trustee, or closely related to someone who has passed away and noticed that a COVID-19 stimulus payment has been deposited into the decedent's account, you should promptly return or reverse the payment back to the government.

Although the IRS has made distributions to decedent's and have not yet realized that these individuals are deceased, once everything gets reconciled, the last thing that you want is to be on the Department of Revenue's radar for misappropriating funds that are not yours. You do not know what the consequence of doing this is, but you may risk personally being on the hook by taking these funds. It is better to be safe than sorry.

UPDATE May 6, 2020

The IRS has provided guidance on what to do when a decedent has received a payment. First, they have made it clear that someone who has died cannot receive the payment. Additionally, they said that if the payment was received via check, you should write “Void” on the endorsement side of the check and mail it back to the Department of Treasury. You should include a note stating the reason you are returning the check. If the decedent has received a direct deposit or you have already cashed it, then you have to pay the IRS back. You can send them a check or money order making it out to “U.S. Treasury 2020EIP” and then the tax ID number (social security number for many people) as the recipient of the check. Include a short letter explaining why you are mailing the check as well. For more information on where to mail your checks, look at Q41 located here.

Stay safe and healthy! And if you have any questions, feel free to contact me.