May 7, 2020
Many federal, state and local agencies are posting Frequently Asked Questions (FAQS) on stimulus relief. The IRS is no exception. The Service has posted
FAQs
that cover everything from who is eligible for economic impact payments to how to return or repay the funds if you are ineligible.
If the payment was a paper check:
- Write "Void" in the endorsement section on the back of the check.
- Mail the voided Treasury check immediately to the appropriate IRS location listed below.
- Do not staple, bend, or paper clip the check.
- Include a note stating the reason for returning the check.
If the payment was a paper check and you have cashed it, or if the payment was a direct deposit:
- Submit a personal check, money order, etc., immediately to the appropriate IRS location listed below.
- Write on the check/money order made payable to “U.S. Treasury” and write 2020 EIP, and the taxpayer identification number (social security number, or individual taxpayer identification number) of the recipient of the check.
- Include a brief explanation of the reason for returning the EIP.
For paper checks, the IRS then provides a list of IRS mailing addresses by state in the answer to
FAQ
.
According to the IRS, if you are in any of these situations, your economic impact payment should be returned:
- Families of deceased taxpayers. A payment made to someone who died before receipt of the payment should return it to the IRS. Return the entire payment unless the payment was made to joint filers. If one spouse is alive or had not died before receipt of the payment, you only need to return the portion of the payment made on account of the decedent. This amount will be $1,200 unless adjusted gross income exceeded $150,000.
- Incarcerated taxpayers. A payment made to someone who is incarcerated should be returned to the IRS. A person is incarcerated if he or she is described in one or more of clauses (i) through (v) of Section 202(x)(1)(A) of the Social Security Act (42 U.S.C. § 402(x)(1)(A)(i) through (v)). For a payment made with respect to a joint return where only one spouse is incarcerated, you only need to return the portion of the payment made on account of the incarcerated spouse. This amount will be $1,200 unless adjusted gross income exceeded $150,000.
- Undocumented taxpayers. A person who is a non-resident alien in 2020 is not eligible for the payment. A person who is a qualifying resident alien with a valid social security number (SSN) is eligible for the payment only if he or she is a qualifying resident alien in 2020 and could not be claimed as a dependent of another taxpayer for 2020. Aliens who received a payment but are not qualifying resident aliens for 2020 should return the payment to the IRS.
The instructions do not address whether recipients are required to return the payments, what will happen to them if they do not send the money back, or what is the deadline. We will continue to watch for updates to the
IRS’ FAQs
.
Stay safe,
Rich Higgins, CPA
Managing Principal - New Jersey Office
McCarthy & Company
Sources: Small Business Administration and Internal Revenue Service
Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).
