@thisblows
I'm not qualified to state whether a 1041 should have been filed in 2023. If a 1041 was filed in 2023, then it needs to be amended for this extra $2900, and the amended K-1s will be sent to each heir, who will need to amend their 2023 personal tax returns to account for the money. (I presume the heirs already have the money itself, you just didn't know there was a 1099 to go with it.)
If a 1041 was not filed, then I think @fanfare is probably on the right track that you can report this as "income in respect of a decedent." This still means that each heir who got a share of this money must report it on an amended 2023 tax return. Since this is a 1099-INT, I assume the entire $2900 is taxable interest, and the principal was already distributed at some point. If this was a long-term interest bearing account, then interest that accrued (but was not paid) prior to their deaths might be reportable on their 2020 tax return, and only interest that accrued after their death is reportable by you, but reopening the 2020 return is another can of worms you might not want to open, and the simplest thing to do is for each heir who got a share of the estate to report the same percentage of the $2900 as income in respect of a decedent on their 2023 tax returns.
