Legal Definitions - canceled check

A canceled check is a check that has been processed and cleared by the bank. This means the funds have been successfully transferred from the payer's account to the payee's account. Once a check is canceled, it cannot be cashed again and serves as official proof that a payment was made and completed. Banks often provide digital images of canceled checks through online banking platforms or may return physical copies marked as "paid" or "canceled."

• Example 1: Resolving a Billing Dispute

  Imagine a homeowner receives a bill from a utility company claiming they missed last month's payment, even though the homeowner is certain they mailed a check. To resolve this, the homeowner can access their online banking and retrieve the digital image of the canceled check for that utility payment. This image, showing the check was processed and the funds debited from their account, serves as irrefutable proof that the payment was made, allowing them to dispute the erroneous bill successfully.

• Example 2: Documenting a Charitable Contribution for Taxes

  A person donates a significant sum to a local charity by writing a check. When tax season arrives, they want to claim this donation as a deduction. The canceled check acts as a crucial piece of documentation for the Internal Revenue Service (IRS). It proves that the funds were indeed transferred from their account to the charity, substantiating their claim for a tax deduction.

• Example 3: Verifying a Security Deposit Refund

  A tenant moves out of an apartment and is expecting their security deposit back. The landlord mails a check for the refund. A few weeks later, the tenant checks their bank statement and sees the check has been deposited and cleared. The bank's record of this canceled check confirms that the landlord fulfilled their obligation to return the deposit, providing the tenant with a clear record of the transaction.