IRS Update: Deceased Taxpayers' Estates Required to Return Economic Impact Payments, Given Instructions on How to Return the Funds


MAY 06, 2020 


The IRS has added information to their “Economic Impact Payment Information Center”[1] on their website dealing with payments made to deceased taxpayers.  

Shortly after the IRS began issuing economic impact payments (EIP) to taxpayers, reports began coming up of amounts being paid to deceased taxpayers.  While the Treasury Secretary indicated that such payments were made in error and should be returned to the government, no specific guidance was issued by the IRS until May 6. 

The new guidance both makes clear the IRS position on when the payment will need to be returned and also the mechanics of returning the payment. The May 6 changes also contain information about EIPs related to resident aliens and incarcerated individuals.

Payments to a Deceased Individual
Question 10 answers the question about exactly what the cut-off for the date of death is that would trigger the return of an EIP. The IRS requires the taxpayer be alive when the payment is received.  

The guidance states:

Q10. Does someone who has died qualify for the Payment? (added May 6, 2020)

A10. No. A Payment made to someone who died before receipt of the Payment should be returned to the IRS by following the instructions about repayments. 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.

Example

Mary received her EIP electronically in her bank account on April 20.  She dies on April 21.  Mary’s estate is not required to return the EIP payment.  However, had Mary died on April 19, then the estate would be required to return the payment since it was not received by Mary prior to her death.

As is noted in the example, if the payment relates to a married couple, only the amount allocable to the deceased spouse must be returned.

Resident Aliens
While non-resident aliens do not qualify for an EIP per the law, resident aliens can qualify.  Question 11 provides:

Q11. Does someone who is a resident alien qualify for the Payment? (added May 6, 2020)

A11. A person who is a non-resident alien in 2020 is not eligible for the Payment. A person who is a qualifying resident alien with a valid SSN is eligible for the Payment only if he or she is a qualifying resident alien in 2020 and could not be claimed as a dependent of another taxpayer for 2020. Aliens who received a Payment but are not qualifying resident aliens for 2020 should return the Payment to the IRS by following the instructions about repayments.

Returning an Erroneous Payment
The page concludes with instructions on how an erroneous EIP should be returned to the government.  Question 41 provides:

Q41. What should I do to return an Economic Impact Payment (EIP)? (added May 6, 2020)

A41. You should return the payment as described below.

If the payment was a paper check:

Write “Void” in the endorsement section on the back of the check.

Mail the voided Treasury check immediately to the appropriate IRS location listed below.

Don’t staple, bend, or paper clip the check.

Include a note stating the reason for returning the check. 

If the payment was a paper check and you have cashed it, or if the payment was a direct deposit:

Submit a personal check, money order, etc., immediately to the appropriate IRS location listed below.

Write on the check/money order made payable to “U.S. Treasury” and write 2020EIP, and the taxpayer identification number (social security number, or individual taxpayer identification number) of the recipient of the check.

Include a brief explanation of the reason for returning the EIP.

The IRS provides a table with the address to return the check to based on the state on the webpage.

The locations are:

Maine, Maryland, Massachusetts, New Hampshire, Vermont

Andover Refund Inquiry Unit
1310 Lowell St Mail
Stop 666A
Andover, MA 01810

Georgia, Iowa, Kansas, Kentucky, Virginia

Atlanta Refund Inquiry Unit
4800 Buford Hwy
Mail Stop 112
Chamblee, GA 30341

Florida, Louisiana, Mississippi, Oklahoma, Texas

Austin Refund Inquiry Unit
3651 S Interregional Hwy 35
Mail Stop 6542 
Austin, TX 78741

New York

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

Alaska, Arizona, California, Colorado, Hawaii, Nevada, New Mexico, Oregon, Utah, Washington, Wisconsin, Wyoming

Fresno Refund Inquiry Unit
5045 E Butler Avenue
Mail Stop B2007
Fresno, CA 93888

Arkansas, Connecticut, Delaware, Indiana, Michigan, Minnesota, Missouri, Montana, Nebraska, New Jersey, Ohio, West Virginia

Kansas City Refund Inquiry Unit
333 W Pershing Rd
Mail Stop 6800, N-2
Kansas City, MO 64108

Alabama, North Carolina, North Dakota, South Carolina, South Dakota, Tennessee

Memphis Refund Inquiry Unit
5333 Getwell Rd Mail
Stop 8422  
Memphis, TN 38118

District of Columbia, Idaho, Illinois, Pennsylvania, Rhode Island

Philadelphia Refund Inquiry Unit
2970 Market St
DP 3-L08-151
Philadelphia, PA 19104

A foreign country, U.S. possession or territory, or use an APO or FPO address, or file Form 2555 or 4563, or are a dual-status alien.

Austin Refund Inquiry Unit
3651 S Interregional Hwy 35
Mail Stop 6542 AUSC
Austin, TX 78741

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