Second stimulus payment

[Greta]

Deceased clients apparently did not get the second stimulus payment. How should I respond in the worksheet - if I put a zero for the amount received, it pops up as a refund. Shall I assume that the IRS will sort this out and not include it in the refund?

[IRonMaN]

If they were alive for one day in 2020, they are entitled to the full credit.

[qbteachmt · Accepted solution]

"Deceased clients apparently did not get the second stimulus payment."

Did they die in 2020? Because 2020 is all that matters.

Perhaps it would help to review what is really happening:

The funds were paid out as Advanced payment against a projection. The projection used 2018 or 2019 tax returns. But 2020 is the Actuals. You use the 2020 return to reconcile what a person is entitled to, against what they got.

You might want to bookmark these links and read the IRS guidance.

https://www.irs.gov/newsroom/economic-impact-payment-information-center-topic-a-eip-eligibility

https://www.irs.gov/coronavirus/second-eip-faqs#Eligibility

One for each EIP.

[Greta]

Clients died mid-2020, so they correctly did not receive their $600 second stimulus. But if I check the box that indicates they did not receive it, the $600 appears as part of the refund. But they are not entitled to it. Do I leave it in the refund, or do I respond otherwise in the stimulus worksheet.

[Greta]

Ah, rereading your response: To reconcile, I indicate in the worksheet what they are entitled to -- which is zero. Let me go back to the worksheet.

[qbteachmt]

"so they correctly did not receive their $600 second stimulus."

But that is Wrong. Did you follow those links to learn?

[qbteachmt]

@Greta 

This is Wrong: "I indicate in the worksheet what they are entitled to -- which is zero."

Read everything I provided.

[IRonMaN]

"what they are entitled to -- which is zero"

Nope.  As long as they had a pulse at 12:01am on 1/1/20, they are entitled to the full credit.  The software knows what it is doing as long as you have the correct amounts entered in for what they actually received by check or direct deposit for the year.

[Greta]

OK, I finally get it. If they were alive on day 1 of 2020, they are entitled to the $600. It's just curious that neither of my two clients who died in July and in November 2020 received the $600. Only their spouses received the stimulus.

On a personal note, I received a check for $600 addressed just to me, but my husband of 50+ years who is fully alive received nothing. Odd.

[IRonMaN]

Maybe he received the check but he's just not talking 😉

[qbteachmt]

"It's just curious that neither of my two clients who died in July and in November 2020 received the $600. Only their spouses received the stimulus.

On a personal note, I received a check for $600 addressed just to me, but my husband of 50+ years who is fully alive received nothing. Odd."

Received has nothing to do with Eligibility.

Again: The payments are Advances. They used 2018 or 2019 tax returns to project what a tax payer might be eligible for, but it is 2020 Actual data that matters.

[qbteachmt]

"Maybe he received the check but he's just not talking"

Oh, wow; maybe they threw away the prepaid VISA card as bogus?

[kathetaxes]

Please answer the question below.  My client passed away on 7/14/20.  Is  he entitled to the second payment of $600.00?  If not, how do I respond the EIP worksheet.

[IRonMaN]

Yes.

[qbteachmt]

"My client passed away on 7/14/20."

As long as he was alive on Jan 1, he is entitled to all EIP funds. There is no spliltting the year 2020 for anyone.

"Is he entitled to the second payment of $600.00?"

Both payment amounts, whether received or not, and based on income and dependents and other issues you should read up on. You use the links provided, because you should know this and not need to ask the internet about it.

Perhaps it would help to review what is really happening:

The funds were paid out as Advanced payment against a projection. The projection used 2018 or 2019 tax returns. But 2020 is the Actuals. You use the 2020 return to reconcile what a person is entitled to, against what they got.

If the person is not a dependent in 2020, then they would be entitled to the payment/credit as individual filers. That doesn't mean "not being claimed." It means "no longer qualifies as a dependent."

You might want to bookmark these links and read the IRS guidance.

Interactive wizards portal for determining dependency:

https://www.irs.gov/help/ita

And:

https://www.irs.gov/newsroom/economic-impact-payment-information-center-topic-a-eip-eligibility

https://www.irs.gov/coronavirus/second-eip-faqs#Eligibility

One for each EIP.