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 should 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. 
Whether you have to return the money is another question. “There’s no legal interpretation,” Nina Olson, a former IRS official and current executive director of the Center for Taxpayer Rights, told The Wealth Advisor.  “I don’t know how they’re basing their decision” to request the money be returned.  Olson said it is “unlikely” the IRS would sue taxpayers for the erroneously awarded stimulus money.

Retirement account owners, many of whose retirement balances have been pummeled by a stock market drop due to the coronavirus pandemic, do not have to take mandatory withdrawals this year. 

Federal law requires individuals who were age 70 1/2 before the end of 2019 to begin taking required minimum distributions (RMDs) from their retirement plan in April of the year after they turned 70. (Note that those who were younger than 70 ½ at the end of 2019 can wait until they turn 72 to take RMDs) The amount of the distribution is based on the value of the account at the end of the previous year, but the funds you withdraw are treated as taxable income in the year you take the distribution. 

The coronavirus pandemic caused the stock market to tumble, depleting many retirement accounts. RMDs for this year would be based on the value of the account at the end of 2019, when the account likely had more money in it because the stock market was at a high point. Although the market has rallied somewhat, it still isn’t back to where it was at the end of 2019. 
Recognizing this, the coronavirus relief bill known as the CARES Act waives the requirement that individuals take RMDs from their non-Roth IRAs and 401(k)s in 2020. This includes any 2019 distributions that would otherwise have to be taken in 2020.  Waiving RMDs will allow retirees to retain more of their savings. The waiver applies to individuals taking RMDs from their own retirement accounts as well as people who have inherited retirement accounts. 

Generally, it is considered a good idea to not take a withdrawal if you do not need to because leaving the money in the account allows it to continue growing tax-deferred. Taking a withdrawal can also increase your 2020 tax burden. However, there are circumstances where it may make financial sense to take an RMD, for example if you need the money to live on. In addition, if you know you are going to be in a much lower tax bracket in 2020, but expect your tax bracket to increase next year, it might make sense to withdraw the money now so you can pay taxes on the withdrawal at a lower rate. 
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If you already took an RMD, you may have the option to return it to the account it came from or another retirement account. Usually RMDs cannot be rolled over into another account, but because the CARES Act waived RMDs, they are considered voluntary distributions. This means they can be redeposited or rolled over into a new retirement account (including a Roth account) as long as you do it within 60 days. The IRS has provided guidance, waiving the 60-day rule if you took an RMD between February 1 and May 15 as long as you roll over the RMD by July 15, 2020. This type of rollover can only occur once per year, so if you rolled over a distribution within the previous 365 days, you cannot do it again. 

With older Americans being most at risk from the COVID-19 coronavirus, the response to the pandemic is highlighting issues of ageism in the United States. According to experts, ageism is evident both in the response to the virus and the lack of protective equipment allocated to nursing homes.

Experts on aging assert that the medical field, politicians, and the public may have acted quicker and taken the coronavirus more seriously if the perception had been that it primarily affected younger Americans. In an article in the Washington Post, Syracuse law professor Nina Kohn argues that the “devaluation of older lives” has caused more older Americans to die than necessary. 

Many young people ignored social distancing recommendations at the start of the pandemic. Headlines emphasizing the virus’s effect on young people (For example: "It isn’t only the elderly who are at risk from the coronavirus" and "Not just older people: Younger adults are also getting the coronavirus") were used to persuade Americans to take the virus seriously. Geriatrician Louise Aronson pointed out that “when you say ‘just’ older people, it sounds like, well, it’s just killing old people, they’re all dying anyway.” Aronson adds that even some older Americans have not followed social distancing recommendations because they do not want to think they are “old.” According to Aronson, “It’s almost as if, if they’re not out there doing things, then they’re one of those old people that doesn’t count. We have created that cultural reality, so shame on all of us.” As the debate raged about closing our economy to prevent the spread of the virus, Texas Lieutenant Governor Dan Patrick even suggested that seniors would be willing to give up their lives in order to help the economy.

Even though COVID-19 has been more deadly for seniors who have contracted the virus, hospitals have focused on helping younger patients. A geriatrician in San Francisco writes in The Atlantic about that special clinical protocols to deal with COVID were developed for children and adults, but not for seniors. Kohn explained that “Ageism is evident in how we talk about victims from different generations, in the shameful conditions in many nursing homes and even -- explicitly -- in the formulas some states and health-care systems have developed for determining which desperately ill people get care if there’s a shortage of medical resources.” 

Nursing homes have been a hotbed for coronavirus, but have been slow to receive the necessary protective equipment for their employees and patients. Bob Kramer, the leader of Nexus Insights, a think tank on aging issues, told Forbes that ageism is apparent everywhere during the pandemic. “It showed up when the management of your parent’s assisted living, memory care, or skilled nursing facility asked for help from their state or county government in securing personal protective equipment (PPE) for their staff and residents. They were told to get in line behind hospitals, medical personnel, government facilities, and military installations. Test kits? Same story. They are victims of our government’s unwillingness to prioritize the health and safety of older adults and those who care for them.”
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Ageism is nothing new, but the coronavirus has exposed the phenomenon in a stark way.