The CARES Act (Coronavirus Aid, Relief and Economic Security Act) provides automatic payments of up to $1,200 per adult and $500 per child to taxpayers who filed tax returns in 2018 and 2019, as well as many seniors and retirees who may not file tax returns but receive social security benefits.  Some of these people have since died, and their Estates have received stimulus checks.  Should this money be returned?  The CARES Act, while intended for relief to those living through the COVID-19 pandemic, permits recipients to keep the full stimulus amount received, even if the check issued is too large.  The administration, however, has indicated it wants its money back from Estates for deceased taxpayers.  The IRS has not yet issued regulations or guidance.

The administration’s position is pre-printed on the paper stimulus check envelope:  “IF RECIPIENT DECEASED Check here and drop in mailbox.”   While there is no date to cut off a taxpayer’s right to receive the benefit, those electing to return a decedent’s stimulus check may wish to do so via certified mail.   The administration elaborated its position on April 28, 2020 in an interview with The Wall Street Journal. Treasury Secretary Steven Mnuchin stated:  “You’re not supposed to keep that payment…We’re checking the databases, but there could be a scenario where we missed something, and yes, the heirs should be returning that money.”  Id.  According to an April 28, 2020 article on Politico,   “[a] Treasury spokesperson indicated the department is developing a plan to retrieve the coronavirus-related payments, but didn’t provide details.”  Open questions remain as to whether, how and to what extent, the administration will enforce its position.

In planning for future expenses, Executors and heirs should consider that Congress may expressly exclude Estates from future stimulus monies.  And, keep in mind, the IRS or Treasury Department could match potential future stimulus recipients against the Social Security Death Index, and refuse to issue future stimulus checks to Estates.

Timoney Knox, LLP Wills, Trusts and Estates group attorneys are available to discuss the CARES Act, and its impact on Estate Administration.  (Last updated April 30, 2020 at 4:30 pm.)