Deceased Employee Payroll Interface Information Package 2025

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Deceased employees wages. 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 the payment to the estate or beneficiary on Form 1099-MISC.
These tasks may include: Notifying benefits providers and insurance companies. Processing the employees final paycheck. Handling any outstanding expense reports or reimbursements.
If the employee has any paychecks that were uncashed at the time of death, the check must be canceled and reissued to the employees beneficiary, executor or personal representative in the same net amount and withholding and ing to the employee resident/lived in state law.
As a general rule, an uncashed paycheck issued prior to the employees death should be canceled, and a new check should be issued in the name of the employees estate or beneficiary. The new check should have the same amount withheld for tax purposes as the old check.
Yes, you must take certain steps as an employer like filing a W-2 form for a deceased employee to compensate their estate for unpaid work time.
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You open an estate with the probate court and obtain a letter of authorization. Then you can file the tax return and indicate the individual is deceased in the appropriate box.

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