- The IRS sent out stimulus checks to some deceased taxpayers and foreign workers in error.
- The agency is now asking that these people, in addition to anyone who is in prison or married to an incarcerated individual, return the money.
- To return a paper check sent by mistake, you need to void the check and send it to an IRS location based on the state you live in.
- To return a direct deposit, you need to write a personal check or money order addressed to the IRS location based on your state.
- Read more personal finance coverage.
Most Americans getting a stimulus check won’t have to repay the money to the US government — but there are a few exceptions.
When stimulus payments started hitting bank accounts in mid-April, thousands of foreign workers living overseas and people with recently deceased relatives were surprised to see they had gotten money. Many believed it was probably an error but weren’t sure how to send it back.
In newly released guidance, the IRS confirmed on Wednesday that some economic impact payments were indeed sent by mistake to nonresident aliens, incarcerated people, and deceased taxpayers. It’s now asking those recipients, or their family members, to return the money.
How some people got stimulus checks by mistake
Stimulus payments are largely based on 2018 and 2019 tax returns. Anyone with a Social Security number who isn’t claimed on someone else’s tax return as a dependent — and falls under the income limits — is in line to receive a payment. Nonfilers and people who receive federal benefits are also getting payments.
Couples who file jointly could get up to $2,400, plus an extra $500 per child under age 17, while individual filers can get up to $1,200.
Some foreigners who were in the US temporarily to study or work in the last two years may have e-filed tax returns meant for US citizens, putting them in the database to receive a payment, tax expert Donna Kepley told Politico.
As for couples who file taxes jointly, it looks like money was automatically being sent to the bank account or address on the joint tax return without being cross-checked against other records to confirm whether both spouses are still living.
The IRS hasn’t announced consequences for keeping a check sent in error
The IRS says that the living spouse is entitled to keep their portion of the stimulus payment — which would be half of the total amount — if their adjusted gross income (AGI) is below $150,000. The same goes for spouses of people in prison who may have received the full payment permitted for joint filers.
To be clear, the IRS hasn’t outlined any consequences for not returning a stimulus check it sent by mistake. More than half of the 150 million stimulus payments earmarked for Americans have already been delivered. There’s a good chance some people who got stimulus checks in error may have already spent the cash.
The newly released guidance says you “should” return the money “immediately,” but there’s no official mandate. The CARES Act has no clawback provision allowing the IRS to take back money it has already disbursed during the coronavirus national emergency.
How to return a stimulus check
If you received an erroneous paper check, here’s what to do:
1. Write “void” in the endorsement section on the back of the check.
2. Write a note to include with the check explaining why it’s being returned.
3. Mail the check and the note to the IRS location based on the state you live in. The list of addresses is available on the IRS website.
If you got a direct deposit, or you already cashed the paper check you received, here’s what to do:
1. Submit a personal check or money order to the IRS address corresponding to your state — you’ll find that list here.
2. Make it payable to “U.S. Treasury” and write “2020EIP” along with the recipient’s Social Security number or individual taxpayer identification (TIN) number.
3. Write a note to include with the check explaining why it’s being returned.
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