Smart Tax Planning

The Treasury Department is canceling stimulus checks to dead recipients

Key Points
  • Deceased individuals were among the millions who received stimulus payment checks from the IRS this spring.      
  • An estimated 1.1 million payments were made to dead people, adding up to $1.4 billion, as of April 30, according to the Government Accountability Office.
  • The Treasury Department is canceling those checks to dead recipients.
Treasury Secretary Steven Mnuchin speaks during the daily Covid-19 briefing in the Brady Briefing Room of the White House on April 21.
Mandel Ngan | AFP | Getty Images

The Treasury Department is canceling the stimulus payments it distributed to dead people, according to the IRS.

"The Bureau of Fiscal Services has canceled outstanding Economic Impact Payment (EIP) checks issued to recipients who may not be eligible, including those who may be deceased," the IRS said on its website. 

The bureau, along with the IRS, are both agencies overseen by the Treasury Department.

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As part of the CARES Act, the federal government pushed out economic impact payments — stimulus checks — to millions of Americans this spring. Individuals were eligible for up to $1,200 in federal funds, plus $500 for each qualifying child under age 17.

Close to 160 million of these payments were made as of June 3, exceeding $267 billion, according to Treasury.

However, as many as 1.1 million payments — or $1.4 billion — went to dead individuals, the Government Accountability Office found.

Repayment rules

The IRS determined how much taxpayers received based on their 2018 or 2019 income tax returns. Individuals with an adjusted gross income of more than $75,000 ($150,000 for married-filing-jointly) received smaller stimulus payments.

Individuals with more than $99,000 in AGI ($198,000 for married couples) were phased out of the payments altogether.

Married taxpayers who filed as such in a previous year may have received $2,400 in stimulus payments from the federal government. However, if one spouse has since passed away, the survivor is really entitled to only half that amount.

Similarly, the family members of a deceased taxpayer may have received that person's check in the mail.

So who's getting the stimulus checks?

In both cases, stimulus checks paid to dead people are supposed to be returned to the IRS.

Recipients can void the check and mail it to the tax agency with an explanation. If they already cashed the check or received the funds via direct deposit, they can write the IRS a check or money order, as well as a note explaining why they're returning the money.

The IRS has more specific instructions on returning the funds here.

It's not clear whether or how the IRS or Treasury will go after individuals who opt to keep these payments.

They're stopping people who have more malicious intentions from scooping up the checks.
Garrett Watson
senior policy analyst at the Tax Foundation

"There have been some mixed messages on this topic," said Garrett Watson, senior policy analyst at the Tax Foundation.

Voiding uncashed checks is a way for Treasury to prevent erroneous payments without taking the aggressive step of clawing back the funds, he said.

"They will go after low-hanging fruit, be it paper checks or canceling payments that haven't been cashed," Watson said.

Canceling the check also heads off fraud. "They're stopping people who have more malicious intentions from scooping up the checks," he said.

Excess stimulus payments


As if this weren't confusing enough, the IRS doesn't always require repayment of excess stimulus checks.

While Treasury Secretary Steven Mnuchin and the IRS have been adamant that dead recipients aren't supposed to receive payments, the federal government has allowed some people to keep stimulus overpayments.

For instance, if a taxpayer received a $500 payment for a child who just turned 17, that taxpayer won't be required to repay that portion.

The same goes for parents who aren't married to each other but who each receive $500 for a child. "There is no provision in the law requiring the repayment of a payment," the IRS said.

Either way, all check recipients should retain Notice 1444 — a letter from the IRS that spells out the amount of money received. You'll need it when you file your 2020 taxes next spring.