On Thursday, it was reported that the IRS has sent approximately 1.4 billion dollars-worth of stimulus checks to dead people.
The stimulus check distribution began in April, approximately a month after the COVID-19 pandemic began in the U.S.
Since the beginning of the stimulus distribution approximately 1.1 million deceased individuals received checks of up to $1,200. Do the math and that’s approximately $1.4 billion that is not in the hands of the living who are in need of the cash assistance.
The stimulus checks were based off of 2018 or 2019 tax returns and were a part of the CARES Act that set aside $300 billion for the stimulus program; $269 billion has been distributed.
Additional errors made with stimulus checks are payments to incarcerated individuals and additional payments to individuals and families. The additional payments do not have to be returned and individuals will not face any punishment. However, payments to incarcerated individuals and deceased individuals are expected to be returned, according to the IRS.
A partial exception is for widows and widowers that filed taxes jointly prior to their spouse passing away. This exception states that widows and widowers must return the decedents’ portion of the stimulus payment but can keep the rest.
It is not clear what punishment(s) individuals will face if they do not return the maldistributed money.
Currently the IRS has no plan of action to contact individuals who need to return stimulus payments. However, a payment to people who passed away prior to receiving their stimulus payments should follow repayment instructions.
It is not clear how many of the deceased individuals lost their lives to COVID-19.