If the decedent is owed Social Security money after death, Social Security indeed makes payments to the surviving spouse or children and is taxable to whomever it is paid. For example, if a decedent dies mid-year but Social Security makes a corrective payment after the date of death (as they often do in November), the payment is made and is taxable to the spouse or children. If payment was made to the decedent after the date of death but is later returned, Social Security should not include it on the decedent's SSA-1099.
