Did You Know?

Deceased Employee Information

If you made the payment in the same year the employee died and the employee was paying into Social Security and Medicare, you must withhold Social Security and Medicare taxes on the final payment. Report the payment on the employee’s Form W-2 only as Social Security and Medicare wages to ensure proper Social Security and Medicare credit is received.

If you made the payment in the same year the employee died and the employee was paying into Medicare, you must withhold Medicare taxes on the final payment. Report the payment on the employee’s Form W-2 only as Medicare wages to ensure proper Medicare credit is received.

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 also must report it in Box 3 of Form 1099-MISC, Miscellaneous Income, for the payment to the estate or beneficiary. Use the name and taxpayer identification number (TIN) of the payment recipient on Form 1099-MISC

See Deceased Employee Final Payment document for complete details pertaining to the payment for a deceased employee.

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