In their rush to deliver stimulus payments as quickly as possible, the IRS sent $1.4 billion in federal cash to dead people, according to a report from the Government Accountability Office.
On July 10, the IRS officially updated their information on the Economic Impact Payment Information Center page. If you scroll down to question 13, they ask “Why did the IRS send Economic Impact Payments to deceased individuals? What happens to uncashed Economic Impact Payment checks issued to ineligible recipients?”
The answer now states: “Upon enactment of the CARES Act, the IRS worked with unprecedented speed to issue Economic Impact Payments to individuals. The IRS initially implemented the legislation consistent with processes and requirements used with the 2008 stimulus payments, which resulted in EIPs being issued to certain deceased individuals. After further review, it was determined that those who died before receipt of the EIP should not receive the advance payment, also known as EIP. As a result of the review, IRS and the Bureau of Fiscal Services (BFS) took action to prevent future payments to deceased individuals. The cancellation of uncashed checks is part of this process.”
If a dead person’s check has not been cashed, you do not need to do anything else.
Some Individuals May Need to Return Their Payments If They Were Already Deposited
Forbes writes that if one spouse is alive and the other has died, then you would need to return the payment for the deceased spouse by writing a check to the Treasury.
They specify, “For example, if you were married and your spouse passed away, the IRS would’ve sent you $2,400 if you were under the income limits. $1,200 for you and $1,200 for your spouse. You can keep just $1,200 of the $2,400 stimulus payment.”
More information can be found here under the section, “Returning the Economic Impact Payment.”
A Second Stimulus Check Is on the Table
Members of Congress are currently negotiating the prospect of a second stimulus check, but fewer Americans may be eligible to receive a payment this go around.
Last week, Senate Majority Leader Mitch McConnell stated that another check could “very well be part” of the next coronavirus relief bill, according to Forbes. However, McConnell added, “I think the people who have been hit the hardest are people who make about $40,000 a year or less.”
This aligns with a number of legislators hopes to make the next round of checks more “targeted”, as Forbes reported. The outlet quoted Senator Ben Cardin as saying, “I think the next round we’ve got to be more targeted to those who are really in need. So I hope we can target this a little bit better to those who have been hit hard because of COVID-19.”
If an income limit of $40,000 was implemented, then millions of Americans who received a stimulus check the first time would be left out.
Kyle Pomerleau, an economist and resident fellow at the American Enterprise Institute, tweeted on July 6 that implementing a $40,000 income cap would mean sending checks to about 80 million Americans; under the CARES Act, over 159 million payments were sent by June 3 alone, according to AARP.
Lawmakers will continue their negotiations surrounding a second stimulus check when they return from their recess on July 20.