Yes
The employer should have issued a 1099-MISC
You should also have received a 2021 W-2 in your mother's name if your mother was paid wages in 2021 and/or tax was withheld.
Yes
The income is taxable income, but what tax and who pays the tax can depend on several factors:
According to the IRS:
-
", amounts paid to a former employee are subject to social security, Medicare, and FUTA taxes if they would have been paid even if the employment relationship hadn't terminated because of death or disability retirement. For example, a payment to a disabled former employee for unused vacation time would have been made whether or not the employee retired on disability. Therefore, the payment is wages and is subject to social security, Medicare, and FUTA taxes.
Amounts not subject to federal income tax withholding.
The following amounts, whether paid by you or a third party, aren't wages and aren't subject to federal income tax withholding.
-
Payments after the employee's death. Sick pay paid to the employee's estate or survivor at any time after the employee's death isn't subject to federal income tax withholding, regardless of who pays it.
-
Payments attributable to employee contributions. Payments, or parts of payments, attributable to employee contributions made to a sick pay plan with after-tax dollars aren't subject to federal income tax withholding."
A 1099-MISC can report many different types of income, which was confusing for the IRS; Therefore, the IRS brought back Form 1099-NEC (Non-Employee Compensation) for reporting ONLY Self-Employed income.
The payroll department will need to correct the 1099-NEC and report a 1099-MISC.
The instructions from PattiF are helpful for those who wish to use Schedule C-EZ rather than Schedule C. It also lets a Taxpayer use a lesser priced TurboTax program, but a 1099-NEC will always produce business income.
I am also sorry for your loss and hope you have many fond memories.
Asking for a corrected form is not the easiest thing to do I'm sure, but it is highly encourages since the IRS always looks for Self-Employment connected to a 1099-NEC and that means Self-Employment tax.
Best to get it corrected now than deal with the IRS later.
Link for more information
@ameanguitar
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
