Death of a spouse W2 form tax question - Help!

[Evetseel]

Hello Community,

My wife passed away in 2023, but in 2024, she received 3 separate miniscule settlement payments from a prior employer of hers totaling approx $148.00 All 3 payments had fed & state taxes deducted, and I cashed the checks. My question is, I, myself, now file single, but how do I file these?  The 3, W2's have her name and SS#, do I file a separate tax return for her, even though she was deceased all of 2024, or do I somehow add them to my return? Any help would be appreciated.

[jerryseeley]

Look at each of the W2-s and see what year each it is for.  For each year you would amend the tax return for that year. You would add the W2 amount for the amended year(s).  You would want to file an amended return since there was tax withholding.  You would also need to file an amended state return for those years that the W2s are for, ie for each year an amended federal return was filed you would need to amend the state return for each of those years. Hope this helps.

[Evetseel]

Hello,

Thanks for your reply, but I'm still confused. The W2's in question are from 2024, my wife passed in 2023, so I can't file an amended return. I guess whatever settlement these are from, was resolved in 2024, but has been in litigation for years. I am in the process of preparing my own taxes, (I'm filing single now, no longer jointly). I'd like to know how to file her taxes for these 3, W2's, because she obviously wasn't around in 2024. Do I file a return for her, even though she was deceased in all of 2024? This is where my confusion lies.

Thanks

[DaveF1006]

It depends. I suggest to file this on your own return since this isn't a substantial amount of income. Here is how to file on your own return.

1. Log into your account
2. Select Wages and income
3. Less Common income
4. Miscellaneous Income, 1099-A, 1099>start
5. Scroll to the bottom of the page to Other Reportable Income
6. Other taxable income, answer yes
7. Then give a brief description of the income and the amount listed. W2's received for deceased wife after final return was filed.  Enter one total for the two W2's.

To claim the federal income tax withheld.

1. Go to Federal 
2. Deductions and Credits
3. Estimates and Other Taxes Paid
4. Other Income Taxes 
5. Other income Taxes paid in 2024
6. Withholding not already entered on a W2 or 1099.  

[rjs]

The employer should not have issued W-2s. The IRS instructions for Form W-2, under "Deceased employee's wages," says the following. (These are instructions to the employer.)

"If you made the payment after the year of death, do not report it on Form W-2, and do not withhold social security and Medicare taxes.

"Whether the payment is made in the year of death or after the year of death, you must also report it in box 3 of Form 1099-MISC, Miscellaneous Information, for the payment to the estate or beneficiary. Use the name and taxpayer identification number (TIN) of the payment recipient on Form 1099-MISC."

I'm not sure what you should do about this. It not's worth a lot of effort for such a small amount of money. Maybe the best approach is to report the income as other income on your own tax return, as DaveF1006 suggested. But in the description, which has to be short, I would say "W-2s issued to deceased wife after year of death." That would make it clear that the employer reported it incorrectly. In the unlikely event that you get an IRS notice about unreported income, you could point out the employer's error and show that you reported the income on your tax return.

I would give up on getting credit for the tax that was withheld, and not enter it on your tax return. Claiming tax withheld that was not reported to the IRS with your Social Security number is almost guaranteed to generate an IRS notice and delay processing of your tax return. Again, it's not worth the trouble for such a small amount of money.

[Evetseel]

Thank you for your response. What you guys suggest makes sense, however not sure where I'm supposed to put "W2s issued to wife after year of her death" There is no comment section.... It also turns out her reportable earnings are even less than I thought, its' only $32.19

I might end up just not even reporting this, as the earnings are so minimal, but this really bugs the you know what out of me.

Thanks

[rjs]

If you follow the instructions that DaveF1006 gave you, in step 7 you should have a screen with spaces for a description and an amount. The description is where you put "W2s issued to wife after year of her death."

[Evetseel]

Great, thank you!!