Coronavirus Relief Funds Paid to Deceased Americans Must Be Returned
by Paul Lorrah
​

​The federal coronavirus relief bill has sent direct emergency payments to some 150 million Americans in the wake of the pandemic. Among the recipients are possibly millions of deceased individuals, raising questions about what their survivors should do with the money.

After weeks of silence, the IRS has finally confirmed that the money must be returned and explained how to do it.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law March 27, 2020, included one-time payments of up to $1,200 to millions of eligible individuals, based on their income. To determine who was eligible, the IRS looked at 2018 and 2019 tax returns, without first cross-checking with the Social Security Administration’s master file of U.S. deaths, which apparently would have taken weeks. 

As a result, some individuals who passed away after filing 2018 or 2019 taxes have been receiving relief payments, causing confusion for their families. According to the Centers for Disease Control and Prevention, 2.8 million people died in 2018, which means the IRS potentially could have sent out millions of checks to deceased individuals. Although Treasury Secretary Steven Mnuchin said in an interview that the money had to be returned, the IRS was slow to explain how exactly to go about doing that. 

The IRS has now issued guidance, clarifying that the money must be returned. According to the agency, the full amount of the payment sent to a deceased individual should be returned unless there is a surviving spouse. In that case, only the deceased spouse’s portion should be returned. Checks should be voided and returned by mail to the IRS. If a family member cashed a check or the money was received via direct deposit, the recipient of the funds should send the funds back via a personal check or money order. 

For further instructions on how to return the payment see below [as per the IRS website]

A41. You should return the payment as described below.
​
If the payment was a paper check:

1. Write "Void" in the endorsement section on the back of the check.
2. Mail the voided Treasury check immediately to the appropriate IRS location listed below.
3. Don't staple, bend, or paper clip the check.
4. 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:

1. Submit a personal check, money order, etc., immediately to the appropriate IRS location listed below.
2. Write on the check/money order made payable to “U.S. Treasury” and write 2020EIP, and the taxpayer identification number (social security number,  or individual taxpayer identification number) of the recipient of the check.
3. Include a brief explanation of the reason for returning the EIP.

For your paper check, here are the IRS mailing addresses to use based on the state:
Maine, Maryland, Massachusetts, New Hampshire, Vermont
Andover Internal Revenue Service
310 Lowell St.
Andover, MA 01810

Georgia, Iowa, Kansas, Kentucky, Virginia
Atlanta Internal Revenue Service
4800 Buford Hwy
Chamblee, GA 30341

Florida, Louisiana, Mississippi, Oklahoma, Texas
Austin Internal Revenue Service
3651 S Interregional Hwy 35
Austin, TX 78741

New York
Brookhaven Internal Revenue Service
5000 Corporate Ct.
Holtsville, NY 11742

Alaska, Arizona, California, Colorado, Hawaii, Nevada, New Mexico, Oregon, Utah, Washington, Wisconsin, Wyoming
Fresno Internal Revenue Service
5045 E Butler Avenue
Fresno, CA 93888

Arkansas, Connecticut, Delaware, Indiana, Michigan, Minnesota, Missouri, Montana, Nebraska, New Jersey, Ohio, West Virginia
Kansas City Internal Revenue Service
333 W Pershing Rd.
Kansas City, MO 64108

Alabama, North Carolina, North Dakota, South Carolina, South Dakota, Tennessee
Memphis Internal Revenue Service
5333 Getwell Rd.
Memphis, TN 38118

District of Columbia, Idaho, Illinois, Pennsylvania, Rhode IslandPhiladelphia Internal Revenue Service
2970 Market St.
Philadelphia, PA 19104

A foreign country, U.S. possession or territory*, or use an APO or FPO address, or file Form 2555 or 4563, or if you are a dual-status alien.
Austin Internal Revenue Service
3651 S Inter-regional Hwy 35
Austin, TX 78741

​How The COVID 19 [Corona Virus ] Stimulus Checks Will Affect Your Medicaid Eligibility
 







​The corona virus relief bill includes a stimulus payment to most Americans.

However this payment is concerning to Medicaid recipients and has them wondering how the payment will affect
their benefits.

The Corona virus Aid, Relief, and Economic Security (CARES) Act provides a one-time direct payment of $1,200
to individuals earning less than $75,000 per year ($150,000 for couples who file jointly). Individuals earning up
to $99,000 ($198,000 for joint filers) will receive smaller stimulus checks. Payments are based on either 2018 or
2019 tax returns. These payments include Social Security beneficiaries.

The basic Medicaid rule for nursing home residents is that they must pay all of their income, minus certain deductions, to the nursing home. If the stimulus payment were considered income, it would likely have to go straight to the nursing home. Since in most states Medicaid recipients cannot have more than $2,000 in assets, there was also concern that the stimulus payments could put many recipients over the asset limit. 

In a blog post, the commissioner of the Social Security Administration (SSA) has clarified that the SSA will not consider stimulus payments as income for Supplemental Security Insurance (SSI) recipients, and the payments will be excluded from resources for 12 months.

Because state Medicaid programs cannot impose eligibility requirements that are stricter than SSI requirements, the payments should not affect Medicaid eligibility. 

based on that information, existing Medicaid recipients should not have to pay the stimulus checks to the nursing homes and can leave some or all of the funds in their accounts for up to 12 months.

When evaluating new Medicaid applications, the Medicaid agency should not count the additional funds in the accounts nor the one time check as income for that month.

In states that have "monthly income caps" for Medicaid eligibility and require an Irrevocable Income Trust [QIT or Miller Trust], the funds should not have to be transferred to this account because it is not counted as income.
Please note that that since there is no precedent for these checks it's difficult to say if the Medicaid agencies will be aware of the rules regarding these checks.

If questions arise the commissioner of the SSA has made mention is his blog that you can direct them to.   click here
 
Please note that the above information refers to Long Term Care Medicaid programs - other Medicaid programs and other government benefits programs may view the guidelines differently.

Please note that the above is intended for informational purposes only and does not constitute advice of any kind as each individual's circumstances vary. If you need specific information on your circumstance please contact us. [email protected]   855.471.6771

Medicaid Plus, P.C. processes thousands of Medicaid applications each year and can help you with your Asset Protection and Medicaid application. Please contact us for a free phone consultation.

​