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Dead people may receive a portion of the $ 600 economy checks the federal government issued Tuesday night.
This would mirror what happened last spring when the deceased were among the recipients of an earlier round of direct payments of up to $ 1,200 per person.
By the end of April, more than 1 million deceased had received a check valued at $ 1.4 billion, according to the Government Accountability Office. The IRS asked for this money back, which created confusion and whiplash among heirs such as surviving spouses and family members.
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Now, a $ 900 billion Covid aid package that President Donald Trump signed on Sunday could create a similar situation, despite tax experts said Congress put in a firewall to narrow its scope.
The IRS and Finance Department has not returned a request for comment.
The law, the Coronavirus Response and Relief Supplemental Appropriations Act of 2021, provides for a one-time payment of up to $ 600 per person and $ 600 per dependent child. For example, a family of four could make up to $ 2,400.
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However, the measure does not allow anyone who died before January 1, 2020 to receive any payment.
This protective measure is new, according to Janet Holtzblatt, senior fellow at the Urban-Brookings Tax Policy Center and former tax officer. CARES law was silent about payments to the deceased, she said – an omission that resulted in people filing tax returns for 2018 and 2019 but dying later writing checks.
“Now they have dealt explicitly with the subject of the deceased,” said Holtzblatt about the new law. “”[But] It is silent about those who died in 2020. “
According to Nina Olson, executive director of the Center for Taxpayer Rights, a nonprofit advocacy group, people who died this year should be given a check for $ 600 if they are eligible for one.
It is silent about those who died in 2020.
Senior Fellow at the Urban-Brookings Tax Policy Center
This year is expected to be the deadliest in US history. For the first time, more than 3 million deaths (including cases without Covid) are expected to be recorded.
It is also possible for someone who passed away in 2019 to receive a stimulus check if the IRS does not have up-to-date information from tax forms, Social Security, or other databases at the time a $ 600 check is issued. Said Olson.
In these cases, the agency doesn’t know someone is dead when they pay them.
“Mistakes will happen,” said Olson. “But there will be only a few.”
The maximum stimulus payment goes initially to those who earned $ 75,000 or less per tax return for the last year in 2019.
According to a government accountability report released in June, the IRS knowingly paid $ 1,200 to deaths over the earlier round of payments in the spring.
The agency tracked its proceedings during the Great Recession when the government also issued stimulus checks on deceased Americans, the report said.
The tax authorities then worked with the finance department to determine that these payments were inappropriate, the GAO said. On May 6th, the IRS asked the heirs to return the money. (The same was asked of those in custody.)
But, like last time, the IRS doesn’t have much remedy to force people to repay $ 600 stimulus checks if they are ultimately found to be in error, Olson said.
The agency could ask the Justice Department to bring a lawsuit against an heir or estate that does not return an incentive payment, but that’s unlikely, Olson said.
“You bring so few with you under normal circumstances,” she said from the Justice Department.