Stimulus payment confusion

Client's wife passed away in 2018. But he still received the 1st stimulus payment for both himself and his deceased wife. So he received $1,200 more than he should have. (He received $2,400 while it should be $1,200 for himself only)

Then he did not receive any 2nd stimulus payment at all. Based on his 2020 tax return though, his income level qualified, and therefore he gets the $600 back as Recovery Rebate Credit in his 2020 tax return.

What about the excessive $1,200 that was paid to his deceased wife in the 1st stimulus check though? Should it be deducted from the refund in his 2020 tax return too? Or should it be handled separately from his 2020 tax return by him sending the payment to the IRS directly?

The law doesn't require the return of EIPs issued to the deceased, according to the below article

https://www.chicagotribune.com/coronavirus/ct-nw-coronavirus-stimulus-checks-dead-returned-20200511-3ubbyv34x5f2pihfcrzrdlrdm4-story.html

But the IRS has clearly stated that payments made to deceased people have to be returned. As a tax professional, shall anyone advise his client not to follow the IRS instruction because of a strict interpretation of the law by certain people?

A person alive at any time in 2020 is not disqualified by subsequent death.

OP said she died in 2018.

Reincarnation?

A person that died prior to 2020 is not qualified to receive a stimulus payment. If IRS erred and sent a payment anyway it should be returned. There's nothing in the law that says it's OK to keep a stimulus payment issued in error. If TP's family keeps the money rather than returning it they can worry about what IRS might do about it. Meanwhile they can ponder IRM 21.4.5 .

A person that died prior to 2020 is not qualified to receive a stimulus payment. If IRS erred and sent a payment anyway it should be returned. There's nothing in the law that says it's OK to keep a stimulus payment issued in error. If TP's family keeps the money rather than returning it they can worry about what IRS might do about it. Meanwhile they can ponder IRM 21.4.5 .

I definitely agree with you. And I have notified them that the payment for the deceased wife should be returned to the IRS. I have even sent them the link to the instruction of the IRS on how stimulus payment made to a deceased person is to be returned.

My question is about the procedure. He is filing the 2020 tax return now and he is also claiming the Recovery Rebate Credit of the 2nd stimulus payment which he has not received in this tax return. So can he also return the excessive 1st stimulus payment of his deceased wife in this 2020 tax return by deducting it from his refund? Or he has to handle the excessive 1st stimulus payment separately from the tax return by sending it directly to the IRS?

I am hoping there is a way for him to return the excessive 1st stimulus payment in the 2020 tax return.