BobKamman
Level 15

See Circular E.  The column headings are Income Tax Withholding; Social Security and Medicare; and FUTA.

Deceased worker:   
1.Wages paid to beneficiary or estate in same calendar year as worker's death. See the General Instructions for Forms W-2 and W-3 for details.ExemptTaxableTaxable
2.Wages paid to beneficiary or estate after calendar year of worker's death.ExemptExemptExempt

 

It's maybe not too late for them to correct the W-2 and save themselves $1,300 as well as her.  Hope the next husband doesn't die so late in the year.