Question

My Parent RETURNED her economic stimulus check. How is that reported on the 1040 form for 2020? And 2021?

Forum|Forum|5 years ago
April 6, 2021
1 reply
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My dad passed away in 2018. The first economic stimulus check for $2,400 was made payable to dad & mom. Mom RETURNED the check uncashed and asked for a replacement check for $1,200. She never received the replacement check or subsequent economic stimulus checks--neither in the form of a paper check nor as automatic deposits to her bank account. When inputting $0 for stimulus check received, the Turbo Tax result is a refund of $1,800 instead of tax owed of $202. Should the Turbo Tax entry with result of $1,800 be submitted "as is" or is there another treatment for this situation.

J

JoannaB2

Yes, recovery rebate credit is calculated based on the number of qualified dependents (if any) plus taxpayer/s. A stimulus payment made to someone who died before receiving it should be returned to the government. The entire payment should be returned, unless it was made payable to joint filers and one spouse is still alive. You only need to return the portion of the payment made on account of the deceased person, and this amount will be $1,200. In your mother's case, she will receive $1,800 as recovery rebate credit on her 2020 income return. The Turbo Tax calculation was correct.

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NCPERSON1

@JoannaB2 as I was appropriately admonished by @rjs earlier tonight, a taxpayer is eligible for EIP1 and EIP2 if he was alive as of 1/1/20 and all other qualifications are met. For EIP3, the taxpayer is eligible for EIP3 if he was alive as of 1/1/21 and all other qualifications are met, even if they died before the stimulus was received.

the requirement to return the stimulus is limited to those who died prior to 1/1/20. this is a recent change by the IRS.

Q A5. Did the IRS send payments to deceased individuals? (updated March 9, 2021)

A5. If a first payment was made to someone who died prior to January 1, 2020, it should be returned to the IRS by following the instructions in Topic I: Returning the Economic Impact Payment.

Joint filers with a deceased spouse: For payments made to joint filers with a deceased spouse who died before January 1, 2020, return the decedent’s portion of the payment. This amount will be $1,200 unless your adjusted gross income exceeded $150,000.

If you can’t cash or deposit the check: If you cannot cash or deposit the payment because it was issued to you and a deceased spouse, return the check as described in Topic I: Returning the Economic Impact Payment. After the IRS receives and processes your returned payment, your first Economic Impact Payment will be reversed to you and you can claim the Recovery Rebate Credit on your 2020 tax return, Form 1040 or Form 1040-SR.

The IRS is aware that some surviving spouses weren’t issued their portion of the payment. Eligible individuals who didn’t receive a payment may be eligible to claim the Recovery Rebate Credit when they file their 2020 tax return.

The Bureau of the Fiscal Services (BFS) has cancelled outstanding Economic Impact Payment (EIP) checks issued to recipients who may not be eligible, including those who may be deceased. Recipients should still return these checks as described in Topic I: Returning the Economic Impact Payment instructions