Infants
If a child is stillborn, a social security number and birth certificate are not issued, and the child cannot be claimed on taxes. If you qualify to itemize, any medical expenses can be claimed on Schedule A.
If a child passes after taking a single breath, a birth certificate can be issued. With that birth certificate, the child can be claimed for the year as a dependent on taxes. A social security card does not need to be issued. However, if a social security card is not issued, the return will need to be paper filed (mailed in). The issuance of the birth certificate will also require a death certificate to be issued.
Young Child
If an older minor child passes, they are still considered a dependent for that tax year. If they worked, they may be required to file a tax return, or you may want to file a tax return to get any federal or state refunds. The instructions to determine this are listed below*.
Adult Child
If an adult child passes, a tax return could be required, but may not be. It will depend on the amount of income that they had for the year. The same determination* applies to an adult child as applies to an older minor child.
*To determine if they are required to file, look at Box 1 of their W2 (or the total of their W2s). If it is over $12,950 they are required to file taxes. If it is less, there is no filing requirement.
If it is less than $12,950, the next question is, would there be a refund if you file. Look in Box 2. Federal Withholdings and Box 22 State Withholdings. If there are numbers there, that dollar amount is the refund they are due if you file for it. You can determine if that refund amount is worth filing, but it is not required.
Adults
Spouse:
If your spouse passes away during the calendar year, you are able to file married, filing jointly or separately, for that tax year. If you have minor children, the two years following your spouse’s passing, you qualify for a special tax status, Qualified Widow, provided that you remain unmarried. Qualified Widow status uses the same tax brackets as Married Filing Joint.
Example: Mark passed away May 5, 2022. He is survived by his wife Serina and their son Paxton (6).
Serina files taxes for 2022 as married filing jointly, 2023 & 2024 she is a Qualifying Widow, and 2025, she would file as Head of Household. If Serina did not have Paxton, she would file married filing jointly for 2022 and then single for 2023.
Military:
If someone dies as a result of combat (active duty military) their tax liability for that tax year is zero.
A person who passes can have more than one return to file for a tax year. There will always be a final living tax return. In some cases, depending on assets and how they are distributed, there may be a need to file a Trust/Estate tax return. If any pre-tax funds are sent directly to beneficiaries, they will be included on that person’s tax return. If the funds are issued to a trust or estate and then to beneficiaries, a trust/estate return will need to be filed.
Please ask for help so that you do not pay taxes on money that is not legally taxed. We are happy to talk to you about what is taxable, what is not, and how it is taxed.
Not Taxable for all age groups:
Not Taxable: Life Insurance payouts, funds already in a bank account, sale of personal car or other items, mattress money, other “old” previously taxed funds.
Taxable: Brokerage account liquidation, 401K or retirement distributions, other “new” not previously taxed funds.
Maybe: Sale of their personal residence (highly unlikely!), liquidation of business assets or ownership, and a few other weird money types.
We are always available for a consultation. Please do not hesitate to call, email, or message us. We understand that this is hard and we want to help make it as easy as possible for you.