Pension Income received after death

[alyle99]

Hi,

The estate of a decedent is waiting on three pension checks to be reissued under the estate name.  Should there be any federal tax witheld on these checks and if there is should I request a refund of that amount for the estate?

[Just-Lisa-Now- · Accepted solution]

You'd have to ask the issuer if any tax will be withheld.  But if so, then yes, you would get it refunded back to the estate.

You'd enter the income on Line 8, Other income line of the 1041, and the withholding will be entered on the 1041 Page 2, Sch G, Part II, Line 14 and you'd check the box that it's from a 1099.

[BobKamman]

Now tell us what happened.  We don't see many pension checks around here lately, the banks being more reliable with direct deposit than the Post Office with political shortcomings.  Were these from the same former employer, issued before the decedent's death and just not cashed?  Or did they keep sending checks until the death was reported?  But then why would the estate be entitled to the money?  Or were there three separate pensions, and each of them is paying a pro-rated amount for the final month?  Usually the executor / personal representative can cash those with a deposit to the estate account.  

[alyle99]

Hi,

They were checks that never were cashed because the decedent was to sick to cash them. The estate asked them to reissue the checks to the estate so I assume that no federal withholdings should be included on the new checks since they are issued after death? If there was witholding it would be minimal at a total of $129 for all of the checks.

[BobKamman]

It doesn't matter that they weren't cashed.  The income should still have been included in his 1099-R for the year of death.  It's not going to be taxed twice, so the estate isn't going to pay tax on it.  If tax was withheld the first time around, that should be included on the final 1099-R also.  

[alyle99]

Thank you. They were not included on his final 1099-R so when the pension company reissues the checks and if federal tax is withheld, I will ask for a refund.

[sjrcpa]

"They were not included on his final 1099-R " does not sound right.

The 1099-R is for all payments made. Issuing a 1099-R is independent of whether checks were cashed.