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recovery rebate credit for spouse deceased in 2020

deductible
Level 1

I am completing a joint tax return where one spouse died 1/17/2020.  Turbo tax is calculating a credit of $1,800 for the deceased spouse who received no stimulus cash payment.   My understanding is that the deceased spouse does not qualify for the 1st stimulus payment but does qualify for the 2nd payment.  Turbo tax should just report $600.  Do I need to input the $1,200 as received to over-riie the Turbo tax error? 

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gancpa
Level 2

According to Irs deceased who died in 2020 get  the $

Generally, if you’re a U.S. citizen or U.S. resident alien, you may be eligible for $600 ($1,200  for a joint return), plus $600 for each qualifying child, if you (and your spouse if filing a joint return) aren’t a dependent of another taxpayer on a 2019 tax return, have a social security number (SSN) valid for employment (see exception when married filing joint) and your adjusted gross income (AGI) does not exceed:

  • $150,000 if married and filing a joint return or if filing as a qualifying widow or widower;
  • $112,500 if filing as head of household; or
  • $75,000 for eligible individuals using any other filing status

Your payment will be reduced by 5% of the amount by which your AGI exceeds the applicable threshold above.

You aren’t eligible for a payment if any of the following apply to you:

  • You were claimed as a dependent on another taxpayer’s 2019 tax return (for example, a child or student who may be claimed on a parent’s tax return or a dependent parent who may be claimed on an adult child’s tax return).
  • You don’t have an SSN that is valid for employment issued before the due date of your 2019 tax return (including any extensions).
  • You’re a nonresident alien.
  • Someone was deceased before 2020.
  • Are an estate or trust.

However, you may be eligible to claim a Recovery Rebate Credit on line 30 of your 2020 tax return. Please refer to the instructions for the 2020 Form 1040 for more information.

 

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’ll 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.

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28 Replies 28
IRonMaN
Level 15

TurboTax?  Lacerte? Paid preparer?

ACME Taxes, Tatoos, Tires and Tomatoes (I had to get rid of the turtles - they kept running away)
Just-Lisa-Now-
Level 15
Level 15

I think you may be in the wrong place...this forum is for tax professionals using Intuit's professional tax software, it appears you may be looking for DIY help.

Please visit the TurboTax Help site for DIY support, they may be able to help you.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
gancpa
Level 2

According to IRS  economic  impact question and answer IRS.gov

If taxpayer died after 1/1/2020 get both payments 

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NTCLINDA
Level 3

If a taxpayer died before receiving the payment, they had to return the payment.  So if the person dies in January 2020, they should not get the rebate.

gancpa
Level 2

According to Irs deceased who died in 2020 get  the $

Generally, if you’re a U.S. citizen or U.S. resident alien, you may be eligible for $600 ($1,200  for a joint return), plus $600 for each qualifying child, if you (and your spouse if filing a joint return) aren’t a dependent of another taxpayer on a 2019 tax return, have a social security number (SSN) valid for employment (see exception when married filing joint) and your adjusted gross income (AGI) does not exceed:

  • $150,000 if married and filing a joint return or if filing as a qualifying widow or widower;
  • $112,500 if filing as head of household; or
  • $75,000 for eligible individuals using any other filing status

Your payment will be reduced by 5% of the amount by which your AGI exceeds the applicable threshold above.

You aren’t eligible for a payment if any of the following apply to you:

  • You were claimed as a dependent on another taxpayer’s 2019 tax return (for example, a child or student who may be claimed on a parent’s tax return or a dependent parent who may be claimed on an adult child’s tax return).
  • You don’t have an SSN that is valid for employment issued before the due date of your 2019 tax return (including any extensions).
  • You’re a nonresident alien.
  • Someone was deceased before 2020.
  • Are an estate or trust.

However, you may be eligible to claim a Recovery Rebate Credit on line 30 of your 2020 tax return. Please refer to the instructions for the 2020 Form 1040 for more information.

 

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’ll 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.

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Alice1
Level 2

Thank you so much, this is very helpful.

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marlin114
Level 1

This is correct.  And IRS states that they should return checks if received, or if direct deposited, they need to write a check and return the funds.

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qbteachmt
Level 15

@marlin114 

"This is correct. And IRS states that they should return checks if received, or if direct deposited, they need to write a check and return the funds."

No; once again, let's Review what happened.

A lot of people got checks based on 2018 or 2019 tax returns. But it is only the Reality of 2020 that matters.

There is no Death in 2020 where the amount is split or disallowed. Anyone still alive to Jan 1, 2020 is entitled to all the EIP based on qualifications such as Income levels.

If you are working on clients' returns, you need to follow up on your continuing education programs and learn how this is applied to the 2020 tax returns you are preparing. Lacerte is doing this right; don't over-ride it.

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marlin114
Level 1

Yes, you are right. I stand corrected. Thank you!

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La337537
Level 2

If you look at the rules they would not qualify for either stimilus, this is in the case where they recieved it  based on the 2018 or 2019 return when they shouldn't have, because they were deceased in 2019.    I am not 100% sure but because they became deceased in 2020 and they are filing a joint return they should qualify for the stimulus.  Just like a dependent exemption or anything else you don't prorate their credits you get it for the fullyear.   If they became deceased in say Oct of 2020 wouldn't they get it, you don't prorate it.  You would need to research further but that would be my understanding

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gastonmaya123
Level 1

Ok I am having same issue, my wife passed away on 02/27/20 and we did not receive stimulus money (which we should not have) and when I put down that I received $1800 it keeps giving me a refund of $1800 for her 2 payments. Is this an issue with the software ? Can we confirm that this is accurate. How can this be? 

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IRonMaN
Level 15

Which software?

ACME Taxes, Tatoos, Tires and Tomatoes (I had to get rid of the turtles - they kept running away)
Just-Lisa-Now-
Level 15
Level 15
If she died in 2020, you ARE entitled to the RRC for both of you.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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qbteachmt
Level 15

@gastonmaya123 

You have this Wrong: "and we did not receive stimulus money (which we should not have)"

Perhaps it would help to review what is really happening:

The funds were paid out as Advanced payment against a projection. The projection used 2018 or 2019 tax returns. But 2020 is the Actuals. You use the 2020 return to reconcile what a person is entitled to, against what they got.


https://www.irs.gov/newsroom/economic-impact-payment-information-center-topic-a-eip-eligibility

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

One for each EIP.

 

And ...

 

You seem to be lost on the internet.

You’ve come to a Peer User community for Intuit Tax Preparation products supporting tax preparation professionals using ProSeries, Proconnect and Lacerte , and you may be looking for support as an individual taxpayer. Please visit the TurboTax Help site for support.

Thanks.

 

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NTCLINDA
Level 3

I don't know what software you are using, but if you did not receive any payments, you usually need to put in a -1 to tell the program you got nothing.  Then if you are entitled for 2020, the program will calculate the amount.

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La337537
Level 2

That should be correct, however unless she was put as deceased on your 2019 return you should have received the 1200 and possibly the 600 for her.  

If she passed away in 2020 she should have been entitled to receive the payments whether she got them before or when you file. 

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qbteachmt
Level 15

There is no Splitting this for the person who died in 2020: "you should have received the 1200 and possibly the 600 for her"

There is no considering that it is "possibly."

There is no one who will get only one of the two EIP because of a death in 2020. You either qualify for the EIPs, both of them, or you don't, because the 2020 tax return is what matters. Not the date of death in 2020. If the person died in 2019 or earlier, there is no qualifying for something in 2020; you are already dead. There is no economic impact for you due to an event in 2020.

And getting the Advance or not, also has nothing to do with it; that's just part of reconciling wha you are entitled to, to if you got it as an Advance or not. Either you qualified or you didn't. If you did get the money in Advance, and you qualified, then you are fine. If you did not get any money in Advance, and you qualify, you now get the Refundable Credit. "Refundable" means it would be payable to you, and "credit" means first it is computed against tax owed, to determine how much of it is left to distribute.

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La337537
Level 2

No sense in being harsh, I responded to someone, who didn't say what their income was and some people got a reduced payment the second time depending on income.  I would have been surprised if they both if filing joint didn't get the stimulus together at least the first time.  If the death was reported on the tax return which I had a client like that, they individually received the stimulus.  The reason I could see that is because the personal representative has the choice to decide if they will file a joint return or separate returns.  I am not one that could possibly guess what the IRS is thinking when they decide who to send these checks to. So my response would still be possibly depending upon the circumstance. 

If you don't agree with my response to the person then fill free to add your own response but you don't need to criticize my trying to help someone make the determination for themselves. 

If people fill the need to be rude. Screw you all I will never respond. 

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qbteachmt
Level 15

"No sense in being harsh, I responded to someone"

Not one person here was harsh. You stated this: " am not 100% sure but because they became deceased in 2020 and they are filing a joint return they should qualify for the stimulus. "

And we are sure because we were told this: "where one spouse died 1/17/2020." and "my wife passed away on 02/27/20"

Giving the IRS links is how someone Learns. Remember that this is a Professional Tax Preparer's community of peer users who are using Lacerte.

This doesn't even matter: "I would have been surprised if they both if filing joint didn't get the stimulus together at least the first time."

The money previously paid is Advanced based on Projection. There is no "first time" for what they are entitled to have based on qualification. There is only the 2020 tax return.

"I am not one that could possibly guess what the IRS is thinking when they decide who to send these checks to."

It's all on the web, and it's all in the links I provided. That's why I provide them.

And you've completely overlooked that this is not a Self Help website for TurboTax Users, because this is not the community for using TurboTax. If a person is using TurboTax, this is not the place to get TurboTax Help. The people using and supporting TurboTax are found at the TurboTax Peer Community, which why I provided this info (which is from a Macro given to us by Intuit):

Please visit the TurboTax Help site for support.

Thanks.

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DBNJ
Level 1

SO what happens when the taxpayer died in 2020 but did not receive either stimulus because her 2019 AGI was $109K but NOW, her 2020 AGI is $9k? TT shows she entitled to $1,800 ($1,200 + $600). 

The family is rightfully worried about cashing the $1,800 check -- Is there an IRS example that I can show the family to alleviate their fear of the IRS "coming to get them"?

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NTCLINDA
Level 3

They are entitled to the rebate.

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qbteachmt
Level 15

"Is there an IRS example that I can show the family to alleviate their fear of the IRS "coming to get them"?"

Right here...

Perhaps it would help to review what is really happening:

The funds were paid out as Advanced payment against a projection. The projection used 2018 or 2019 tax returns. But 2020 is the Actuals. You use the 2020 return to reconcile what a person is entitled to, against what they got.

You might want to bookmark these links and read the IRS guidance.

https://www.irs.gov/newsroom/economic-impact-payment-information-center-topic-a-eip-eligibility

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

One for each EIP.

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DBNJ
Level 1

qbteach,

According to Q5 / A5 (of the link you provided), if "someone who died before receiving the payment" it  "should be returned to the IRS"

Q A5. Does someone who died qualify for the payment? Why did the IRS send payments to deceased individuals? (updated November 10, 2020)

A5. No, a payment made to someone who died before receiving the payment should be returned to the IRS by following the instructions in Topic I: Returning the Economic Impact Payment.

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qbteachmt
Level 15

@DBNJ 

"if "someone who died before receiving the payment" it  "should be returned to the IRS" "

Because the checks initially were sent before most people had filed their 2019 tax return. That means it was issued based on 2018 tax returns. And many people died during 2018 and were dead or died in 2019, which means they were not Alive in 2020. Not Alive Jan 1 2020 means you were not impacted by covid-19 at all, because you died in 2019 or earlier. Officially. Because now we know covid-19 started in late 2019, which is why it got named like that.

"Q A5. Does someone who died qualify for the payment? Why did the IRS send payments to deceased individuals? (updated November 10, 2020)

A5. No, a payment made to someone who died before receiving the payment should be returned to the IRS by following the instructions in Topic I: Returning the Economic Impact Payment."

You need to examine the Year of Death. That's why a 2020 tax return for a person who died in 2020 will include their Allowed Credit.

Everyone is over-complicating this, because of the initial chaos for pushing out the payments based on 2018 or 2019 tax returns. All you need to do is examine if this person died before Jan 1, 2020. Alive even for the first date in 2020 = qualifies. And it's for All Funds. There is no splitting the year 2020.

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La337537
Level 2

If you use lacerte there is a worksheet that shows the calculations I would think that would be good for the client. I would just explain that it is a 2020 tax credit so its based on their 2020 income and the worksheet is a reconciliation of what they got in advance and what they should have received. 

Charliejr88
Level 1

could you tell me what form to fill out for a deceased person in 2020? my husband passed away 08/28/2020. and maybe instructions.ty

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NTCLINDA
Level 3

There is no special form.  You just put in date of death on client information page and tell the program the amount of rebates you received.  I am not sure what you are looking for.

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qbteachmt
Level 15

@Charliejr88 

If you are using TurboTax, you are in the wrong place. Well, really:

If you are not using Lacerte to prepare your clients' returns, you are in the wrong place.

You seem to be lost on the internet.

You’ve come to a Peer User community for Intuit Tax Preparation products supporting tax preparation professionals using ProSeries, Proconnect and Lacerte , and you may be looking for support as an individual taxpayer. Please visit the TurboTax Help site for support.

Thanks.

 

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"Level Up" is a gaming function, not a real life function.
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