What to Do with Stimulus Checks Received by Estates

You may have been seeing, reading, or hearing on your favorite source of media that stimulus checks are being delivered to some of our deceased relatives. Personal Representatives of estates have been asking what to do if they receive a direct deposit or a check in the mail with this stimulus payment. Can the estate keep it? Can the heirs keep it? What is everyone supposed to do? The IRS has provided some instructions for us:

Q: My mother’s estate received a, Economic Impact Payment (“EIP”) under the COVID stimulus package. Does the estate get to keep that money?

The short answer is no. If your mother was unmarried when she died, the money needs to be returned to the IRS. The IRS has created a process for returning those payments, which is explained below.

However, if your mother was married and her spouse is still living and they filed a joint return, the living spouse gets to keep his or her portion of the EIP. Your mother’s portion still needs to be returned though. If the couple’s adjusted gross income was less than $150,000, the amount to be returned will be $1,200.

Q: How does the Personal Representative or surviving spouse return my mother’s EIP?

The IRS has created a process for returning the payments to deceased recipients. According to the Q&A section of the IRS website, if the EIP was received as a physical check and you still have the physical check, you should do the following:

  1. Write “Void” in the endorsement section on the back of the check.
  2. Mail the voided Treasury check immediately to the appropriate IRS location listed below.
  3. Don’t staple, bend, or paper clip the check.
  4. Include a note stating the reason for returning the check.

If the payment was received as a physical check which you already cashed or deposited, or if the payment was directly made to a bank account, the IRS recommends you do the following:

  1. Submit a personal check, money order, etc., immediately to the appropriate IRS location listed below.
  2. Write on the check/money order made payable to “U.S. Treasury” and write 2020EIP, and your mother’s identification number (social security number or individual taxpayer identification number).
  3. Include a brief explanation of the reason for returning the EIP.

Q: Where do I send the returned EIP?

For estates in Maine, send the EIP to:

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

You can follow this link for more information IRS website

Candace Augustine, Esq
Rudman Winchell