Deceased People Received Stimulus Checks, Now the IRS Wants It Back

As days go by, more and more people are receiving stimulus checks that were promised by the government as an aide for the coronavirus crisis, and it seems like the dead are included too. New guidance that was released by the Internal Revenue Service on May 6 orders federal stimulus payments sent to people who have died to be returned immediately.

Due to the agency's rush to get stimulus payments out as fast as possible, some of the money was sent to people who had died but had filed their taxes within the past two years. It also seems like they were given the priority instead of the millions of people who are still alive and waiting for their checks. The IRS has to cross-check with another federal agency to get a full list of the deceased.

Stimulus checks sent to dead people

When the news broke it, it was unclear whether the family of the deceased could keep the money, but the IRS now says that the full payment must be returned unless the deceased was married and filed tax returns jointly with a spouse who is still alive. If this guideline is applied, only the portion of the payment belonging to the deceased needs to be returned, according to the agency. If the couple received $2,400, half of it, or $1,200 needs to be sent back.

If a check was received, it should be mailed to the Treasury Department. If the check was cashed or if the payment was directly deposited into the bank account, the IRS is asking people to send a personal check or money order. All of the instructions on how to send the money back was posted online by the IRS.

Since April 11, the IRS has sent more than 122 million payments for a total of $207 billion. The IRS started by sending money to those who had already filed a 2018 or 2019 tax return. The agency also clarified on May 6 that other people who may have gotten a payment but are not eligible, including those who are incarcerated, must also return the stimulus payment.

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Eligibility is based on income, and it excludes those who are earning more than $99,000, head of household filers with one child who earns more than $136,500, and married couples without children earning more than $198,000.

Families who are earning more may still be eligible for stimulus payments if they have children. The phase-out limit depends on the number of children a couple has. For a family of four, the amount is completely phased out for those with incomes exceeding $218,000.

Those who can be claimed as a dependent for tax purposes are also ineligible for payments, like college students, as well as undocumented immigrants who do not have Social Security numbers. Stimulus payments are worth up to $1,200 for individuals and $2,400 for couples, plus $500 per dependent.

Second rounds of stimulus checks

There is still no decision on whether there will be a second round of stimulus checks. There is nothing signed into law to send out a second stimulus check, but there have been debates all across America if the first check is enough to sustain the needs of an individual.

A coronavirus relief bill of $484 billion was signed on April 30, but it was aimed to help small businesses and it did not contain any provision for a second stimulus check for individuals.