EIP Recovery

[Elizabeth53]

Taxpayer passed away March 2020. They received $2,400 for EIP 1. Spouse received only $600 for EIP 2. When I process the Recovery worksheet it calculating $1,200. Other than overriding the $1,200, how can I correct this?

Thanks!!!

[sjrcpa]

There's nothing to correct.

[rbynaker]

I'm probably missing something.  If they received $2,400 and $600 then shouldn't the remaining credit be $600 (assuming MFJ return)?

[Terry53029]

@rbynaker  Here's the link: https://www.irs.gov/coronavirus/second-eip-faqs

A payment won’t be issued to someone who has died before January 1, 2020. If you filed a joint return in 2019 and your spouse died before January 1, 2020, you won’t receive a $600 payment for your deceased spouse, but you’ll still be issued up to $600 for you and $600 for any qualifying children, if all other eligibility criteria are met. 

Regarding eligible individuals who died in 2020, the Recovery Rebate Credit may be claimed on line 30 of their 2020 tax return.  Please refer to the instructions for the 2020 Form 1040 for more information.

[rbynaker]

@Terry53029 

Where do I have the math wrong?

$3,600  Total credit available (based on assumption of MFJ return, under the AGI limits & no kids)
-3,000  Total EIP amounts received ($2,400 + $600)
-------
$ 600  Rebate recovery credit available on return

If the software is showing a $1,200 credit available, I'd dig into the math and see which one of the above numbers was different.

Rick

[Terry53029]

@rbynaker  Your math is fine. I mis-read original poster, as I'm sure @sjrcpa did. His client should be getting $ 600 for deceased husband if she received the $600 for herself already. 🙄

[rbynaker]

Okay, thanks for the follow up.  Please do continue to chime in if you think I have something wrong.  So many of these things are moving targets!  I could easily have missed an IRS Notice or Executive Order that changes the rules I thought I knew when I woke up this morning.

If I'm lucky the last of my 1099s will be out the door tomorrow.  And I have one client who, for whatever reason, wants to wait until Monday to do his employee W-2s (on SSA BSO).  I'm expecting either BSO or the VATax site to crash (or both) but I'll be pleasantly surprised if we can get everything done without a hitch.

[Elizabeth53 · Accepted solution]

According to Instructions for 1040, page 57: Anyone who dies in 2020 is eligible for the 2nd EIP. If it was not received, it can be claimed on the Recovery Rebate Credit.