Most people would be happy to find an extra couple hundred dollars in their mailbox or bank account — unless, of course, the unexpected windfall was earmarked for someone who died. Not only is the money a painful reminder of a loved one's absence, it raises vexing questions: What do I do with it? Should I spend it? Send it back? And if so, how?
That was the dilemma facing Americans who received $1,200 stimulus payments in 2020 by paper check or direct deposit, in the names of deceased spouses and other family members. The federal government had sent stimulus payments to about 1.1 million dead people totaling nearly $1.4 billion. The Internal Revenue Service (IRS) told people to give the money back.
But the rules have changed for the second, maximum $600 stimulus checks, as well as the $1,400 checks being issued now. The legislation that authorized the second stimulus payment to eligible recipients says that only recipients who died in 2019 or earlier must return the payments. But, the legislation that authorized the third round of stimulus payments says that those who died in 2020 aren’t qualified to get a stimulus check. Someone who died in 2021 still qualified.
The IRS is checking to make sure that checks aren’t issued to people who died when they weren’t qualified to get one.
If you received a payment for a deceased person who was not entitled to it, you must return it. You must return a canceled check, too. “A [stimulus] payment made to someone who died before receipt of the payment should be returned to the IRS by following the instructions about repayments,” according to guidance posted on IRS.gov. “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."
How do you return a stimulus payment?
The IRS provided specific instructions for returning an economic impact payment (EIP) sent to a person who is dead.