Economic Impact Payments were prompted by the Novel Coronavirus (COVID-19).
Trusts and Estates attorneys need to be aware that the law authorizes payments to eligible individuals. Section 2201 (d)(3) of the law says that estates and trusts are not eligible individuals.
These payments are authorized by the CARES Act, which is H.R. 748- 116th Congress (2019-2020), the federal Coronavirus Aid, Relief and Economic Security Act. It was signed into law by the president on 03/27/2020.
If someone filed an income tax return for the year 2018 or the year 2019, a check might have been sent to them even if they have since died.
The IRS website was updated on May 6, 2020, to address this issue.
Q10 of the EIP Eligibility and General Information section asks if someone who has died qualifies for the payment.
A10 says that the answer is No. A payment which was made to someone who died before receiving the payment should be returned to the IRS. If the payment was made solely to the deceased person, return the entire payment. If the payment was made to joint filers and one spouse was still alive when payment was received, you only need to return the portion of the payment made for the deceased person.
A41 says that if payment was made by a paper check, and the check was not cashed:
Write “Void” in the endorsement section on the back of the check. Mail the voided check to the appropriate IRS location listed on the website. Do not staple, bend or paper clip the check. Include a note stating the reason for returning the check.
If payment was made by a paper check, and the check was cashed, or if payment was made by direct deposit:
Submit a personal check, money order, etc., to the appropriate IRS location listed on the website. Make the check or money order payable to U.S. Treasury. Write 2020EIP and the recipient’s taxpayer identification number on the check. Include a brief explanation of the reason the payment is being returned.
The address to which the payment should be mailed depends on where the person lived. For New York, payment should be mailed to Brookhaven Refund Inquiry Unit, 5000 Corporate Ct., Mail Stop 547, Holtsville NY 11742. The mailing address is different for people who lived in other states.
The information on the IRS website can be found by going to:
www.IRS.gov
Click on GET CORONAVIRUS TAX RELIEF
Click on ECONOMIC IMPACT PAYMENTS
Click on ECONOMIC IMPACT PAYMENTS INFORMATION CENTER
Click on EIP ELIGIBILITY AND GENERAL INFORMATION
The CARES Act can be found at:
www.congress.gov/bill/116th-congress/house-bill/748
Click on the TEXT tab
Click on PDF
SEction 2201 (d)(3) is on page 55.
Posted 04/12/2020. Updated 05/08/2020.