Personal Finance

About $1.4 billion in stimulus checks sent to deceased Americans

Key Points
  • As the U.S. government rushed stimulus checks out to millions of Americans, some deceased individuals were sent payments in error.
  • A new government report finds that around 1.1 million such payments, totaling about $1.4 billion, were issued.
  • The report calls for direct outreach to relatives of the deceased to get the money back, and better data sharing within the government to prevent such errors.
William Thomas Cain | Getty Images

The federal government has sent stimulus checks of up to $1,200 to millions of Americans — including deceased individuals.

A new report from the Government Accountability Office finds that about 1.1 million payments, totaling almost $1.4 billion, mistakenly have been sent to dead people as of April 30.

Those errors come as the U.S. government has rushed out stimulus payments to millions of Americans in recent months.

The stimulus checks were authorized by Congress with the $2 trillion CARES Act, about $300 billion of which went to the payment program. About 160 million payments totaling $269 billion have been sent, according to the GAO report.

The payments are based on either 2018 or 2019 tax returns, so some individuals who filed still received payments, even though they have since passed away.

Government Accountability Office finds flaws in federal response to Covid-19
Government Accountability Office finds flaws in federal response to Covid-19

Controversy has surrounded the payments to deceased individuals.

For the most part, the IRS doesn't require people to pay back extra money they may have received. "There is no provision in the law requiring repayment of a payment," the agency states on its website. 

But payments to the deceased are an exception, as are checks that went out to people who are incarcerated.

Treasury Secretary Steve Mnuchin made it clear that money to the deceased should be returned. The IRS has said the same.

"A 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 the agency.  

One partial exception is if a married couple filed their taxes jointly, but then one spouse passes away. In that circumstance, the surviving spouse can keep their own payment. But they must return the portion of the money paid to the decedent, according to the IRS.

The GAO report calls for further action from the IRS. It points out that the agency does not currently have a plan on how to reach out to people who need to return the money to instruct them to give it back. 

How to determine eligibility for coronavirus stimulus check
How to determine eligibility for coronavirus stimulus check

"IRS should consider cost-effective options for notifying ineligible recipients on how to return payments; without which, ineligible recipients who would otherwise want to return the payments may be unaware how to do so," the GAO report states.

The IRS sent a letter to all stimulus check recipients confirming that the payment had been sent. The agency could consider sending a follow-up letter to these ineligible recipients to notify them of the situation and provide return instructions, the GAO report suggested.

The GAO also calls for having the Social Security Administration share its death data with the Treasury Department's Bureau of Fiscal Service, which administers the stimulus payments, to help prevent these errors.

While some temporary sharing of this data has since been put in place, the GAO calls on Congress to consider amending the Social Security Act to let the agencies share this data more broadly.

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It's not the first time that the government has sent money to dead people. Thousands of deceased Social Security beneficiaries received stimulus checks following the financial crisis of 2008-09.

The IRS has explicit instructions for how to return the stimulus checks. 

If it's a paper check, you should write "void" on the endorsement section on the back of the check and mail it to the Treasury Department with a note stating why you are sending it back.

If you cashed the check or it was a direct deposit payment, you can send a personal check payable to the U.S. Treasury along with an explanation.