Income received by deceased individual

[jhbvtacpa]

Husband died in TY2020, however his surviving spouse received W-2's, 1099's, etc with her husband's SS# during tax year TY2021. Filed MFJ for TY2020, but obviously can't file MFJ for TY2021.

Any thoughts as to how to report this income, and most importantly withholding, for TY2021?

[sjrcpa]

On a decedent's estate 1041.  

[BobKamman]

You're telling us whose SSN was on the check, but not whose name.  Nor who cashed the check.  Nor the amount -- three figures, or five?  Sounds like income in respect of decedent that goes on widow's 2021 return.  Claiming the withholding might be a problem, but that's something she had more than a year to solve.  

[jhbvtacpa]

About $40k in income, with $6k Fed w/h and $2k State w/h

All documents solely in deceased spouse's name, with monies sent via Direct Deposit to account opened over 50 years ago.

Form 1041? Report income on surviving spouse's Form 1040 with explanation statement for income/withholding?

[Greta]

I doubt the IRS and State can match the withholding to widow's SSN and they won't read your statement. The amounts seem big enough to file a 1041, even if that's a hassle. Otherwise your client loses the withheld taxes.

[Greta]

Unrelated to this question...  But for some reason I've lost my link to ask a question!

Client had a revocable trust with spouse as beneficiary. He died, but trust used her SSN and had no income. Now the trust sold their house for 600K. Lawyer who set up the original trust is not helpful. Do I set up an EIN for the now-irrevocable trust? It would be "easier" to continue using the widow's SSN for the sale of house. an I do that? Lawyer does not know what SSN or EIN he will use for the house settlement!

[BobKamman]

Definitely an unsatisfactory choice of round holes into which to pound this square peg.  But maybe this is why God (or IRS) gave us Form 4852.  Since the 1041 is already late, why not try reporting the income and withholding that way.  Run it up the flagpole and if no one salutes, fall back to the 1041.  At least the income will be reported in the correct year for the widow.

How much was paid in wages, and how much was withheld for FICA taxes?  The widow should ask the employer for a refund of those.  (Should have done that long ago.)  

Direct deposits and automatic withdrawals are wonderful until someone dies.  

[taxes96786]

Have you read the trust? Is spouse also named as trustee? It may be that the original trust, if only in deceased name, may have died along with him. Is she sole beneficiary or are there others? I don't understand how deceased could have created a trust using the spouse's SSN. Too many unanswered questions on this one.