Spouse died in 2020 and IRS is disallowing his EIP 2 payment

Technical topics regarding tax preparation.
#1
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Husband died in August 2020. Only the wife received $600 the following January for the EIP 2 payment. It's my understanding that the IRS changed positions on this after the checks went out so that as long as a deceased spouse was alive during 2020, he or she would qualify for both EIP 1 and EIP 2. Wife received her 2020 refund today and was reduced by the $600 I tried to get her on the 2020 return.

Anyone have this happen?
 

#2
Andrew  
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In the updated EIP FAQs, the IRS explains in question 10 deceased individuals do not qualify for EIPs. The IRS did not provide a bright-line rule regarding the date of death of the individual and instead is relying on the date of payment. If the individual "died before receipt of the payment," they are not eligible.
 

#3
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Andrew wrote:In the updated EIP FAQs, the IRS explains in question 10 deceased individuals do not qualify for EIPs. The IRS did not provide a bright-line rule regarding the date of death of the individual and instead is relying on the date of payment. If the individual "died before receipt of the payment," they are not eligible.


That is different from this guidance:

Will a deceased individual receive the payment? (updated March 25, 2021)

A payment wasn’t 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 weren’t issued a second payment for your deceased spouse, but may have been issued up to $600 for you and $600 for any qualifying children, if all other eligibility criteria were 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 and Form 1040-SR PDF for more information.


https://www.irs.gov/coronavirus/second-eip-faqs#Eligibility
 

#4
Andrew  
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How is it different?
 

#5
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It is my understanding that someone that died in 2020 would be eligible for the recovery rebate credit. Per the actual tax return instructions (I know, instructions are not law):

Line 30
Recovery Rebate Credit
The recovery rebate credit was paid out
to eligible individuals in two rounds of
advance payments called economic impact payments. The economic impact
payments were based on your 2018 or
2019 tax year information. The recovery
rebate credit is figured like the economic
impact payments except that the credit
eligibility and the credit amount are
based on your 2020 tax year information. If you didn’t receive the full
amount of the recovery rebate credit as
economic impact payments, you may be
able to claim the recovery rebate credit
on your 2020 Form 1040 or 1040-SR.
Generally, you are eligible to claim
the recovery rebate credit if in 2020 you
were a U.S. citizen or U.S. resident alien, weren't a dependent of another taxpayer, and have a valid social security
number. This includes someone who
died in 2020, if you are preparing a return for that person. Use the Recovery
Rebate Credit Worksheet to figure the
credit, if any, you can claim. For more
information on the recovery rebate credit, go to IRS.gov/RRC.
 

#6
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Andrew wrote:How is it different?


Your post implies that the TP is not entitled to the $600 of RRC for the deceased spouse. While the deceased would not be entitled to the EIP2 as your post indicates, the OP is questioning the RRC which they should be entitled to.
 

#7
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Update: The IRS sent the deceased's spouse $600 plus interest. I didn't have to do anything. Not that I could have. Impossible to call the IRS now.
 


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