stimulus recovery dead person died 3/17/20

[JOHNNYCPA1]

I have a single person (90 year old) who died on 3/17/2020.  I am doing return.  Is ther person entitled to stimulus recovery credit $1,800 for stimulus 1-$1200 and stimulus 2 $600? 

The person/estate did not get any stimulus checks in mail or direct deposits.

John

[sjrcpa]

Alive in 2020 and below the income limits equals entitled to the Recovery Rebate Credit.

[Anglis]

Do not recommend, I have an elderly client that had to pay back the stimulus money due to death of spouse. IRS sent letter requesting return.

[IRonMaN]

I recommend.  If they were alive for 1 day in 2020, they are entitled to the credit.  Don't confuse the confusion relating to the mailing out of checks in 2020 with the actual credit allowed when filing the return.

[Anglis]

I understand what you are saying, but we have a few clients that returns on death are being held up in system regarding refunds. I am guessing the IRS is looking at those stimulus amounts on return and making decisions regarding the receiving of this credit.

I will keep you posted if they get it. I have already heard that some did not get due to death of spouse.

[qbteachmt]

"I have already heard that some did not get due to death of spouse."

You need to consider which Year they died.

Perhaps it would help to review what is really happening for EIP “stimulus” funds: The funds were paid out as Advanced payment against a projection. The first two payouts were projected based on 2018 or 2019 tax returns, but the eligibility is part of tax year 2020 as 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 eligible for consideration as individual filers. That doesn't mean "not being claimed." It means "no longer qualifies as a dependent." You must correctly address whether they Can be Claimed as a dependent on someone else’s tax return.

The third payout which started in Jan 2021, has different eligibility rules as to dependents and this payout is a projection, using 2019 or 2020 tax returns, then reconciled against Actuals on the 2021 tax return.

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

Interactive wizards portal includes one 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

https://www.irs.gov/newsroom/irs-is-issuing-third-round-of-economic-impact-payments

One for each of the three EIP “stimulus” payments.

[Anglis]

Thank you for the insight. I generate everything the person is entitled to on return. If the IRS corrects it we have no control.

The IRS and government are giving lots of money away so going for it for every client.

A

[dkh]

The IRS is looking at many returns this year.    I have several stuck in the system waiting on IRS to review - some with RRC for child born in 2020 - some with the usual year to year data.   

[sjrcpa]

@Anglis What year did the spouse die?

[BobKamman]

Make guesses all you want but try not to short-change your clients.  And, keep up to date with IRS news.  As they updated yesterday, about 16 million returns are being held up, almost all of them for taxpayers who are still alive, while IRS verifies that the EIP1 and/or EIP2 were not paid to them as claimed.  (Some are also being held for other reasons, like using 2019 income for figuring EIC and CTC as allowed.  Those numbers need to be verified, also.)  The only "decision" IRS has to make is whether the payments were already made, and how much.