Widower deceased January 6, 2020. First stimulus deposited. Returned by check to IRS. TurboTax indicates that she should receive both stimulus amounts. Is that correct?

[PattiF]

The IRS states that you should return a payment for someone who has died.

See the last paragraph in this IRS Stimulus Payment.

[MinhT1 · Accepted solution]

TurboTax is correct.

The deceased is eligible for both stimulus payments which can be claimed on the 2020 tax return as the Recovery Rebate credit.

Only individuals who died prior to January 1, 2020 are not eligible for the Recovery Rebate Credit.

Please read question B1 in this IRS FAQ.

[cls57]

Thanks!  
I thought this was true but couldn’t find an IRS document showing it!

[KFR Executor]

I am the executor for my mother who passed on 3/2/2020.  Turbotax (and the IRS FAQs) indicate that she (her estate) qualify for both stimulus payments.  I received the initial $1200 check post death in April 2020 and returned the uncahsed check to the IRS according to the advice published in 2Q 2020.  IRS has acknowledged return of the initial check.

Has IRS changed its position on eligibility for both payments?  Is the refund "income in respect of a decedent" reportable on 1040 or are the payments income to the estate (reportable on 1041)?

Should I treat the returned check as if no payment had been made?

Thank you in advance for your reply.

[DMarkM1 · Accepted solution]

Yes, the IRS has changed the position.  Taxpayers who died after 1 January 2020 are eligible for the Recovery Rebate Credit on the 2020 tax return.  The payment that was returned will be categorized as "not received" on the tax return. 

The stimulus payments are only entered on the form 1040.  However, they are not income on any return.  You only enter the amounts received, if any, when asked in the "Federal Review" topic as they are just used to calculate the credit due.  

Here is a link with more information on the Recovery Rebate Credit.  See question B12.

[mfitzpac]

Mother in law died Feb 20,2020. Did not receive the stimulus checks. TurboTax wants to give her $1800 in federal payments. We do not want that  How do I amend her Federal forms to reflect this

[JamesG1]

Your mother in law may qualify for the stimulus payments.

However, you may declare $1,200 received for stimulus payment 1 and $600 for stimulus payment 2 if you do not want to receive the Recovery Rebate Credit on line 30 of the 2020 1040 tax return.

IRS FAQ under Will a deceased taxpayer receive the payment?

A payment won’t be issued to someone who has died before January 1, 2020. If you filed a joint return in 2019 and your spouse died before January 1, 2020, you won’t receive a $600 payment for your deceased spouse, but you will still be issued up to $600 for you and $600 for any qualifying children, if all other eligibility criteria are met.

Regarding eligible individuals who died in 2020, the Recovery Rebate Credit may be claimed on line 30 of their 2020 tax return.  Please refer to the instructions for the 2020 Form 1040 for more information.