When someone you love passes away, it feels as if your world is standing still. Unfortunately, this isn’t true of their tax liabilities.

Even after someone dies, the IRS expects a tax return to be submitted on their behalf. Fortunately, you may also be able to claim access to the decedent’s tax refund if the IRS owed them anything at the time of their death. But there’s a particular process you’ll need to follow.

Read on to find out how to file the tax return of a deceased person, who’s responsible for their tax liabilities, and who gets their tax refund.

Key Takeaways

• The responsibility for filing the tax return of a deceased person falls on the deceased individual's spouse or the executor of their estate.

• Taxes owed by a deceased person are generally paid from the assets of the deceased individual's estate.

• Once tax liabilities are paid, the IRS will pay a decedent’s tax refund into their estate.

Who's Responsible for Filing the Tax Return of a Deceased Person?

Before any tax refund is claimed, the IRS must receive a valid tax return on behalf of the person who’s died. 

Generally speaking, responsibility over who must submit that return will depend on whether the decedent has a surviving spouse. That means if you typically file a joint return with your spouse and they die, you’re responsible for submitting all the relevant tax information about your spouse (prior to their death).

If the decedent wasn’t married at the time of death (or their spouse had already passed away), things get a little bit more complicated.

Alec Kellzi, a CPA at IRS Extension Online, explains:

“The responsibility for filing the tax return of a deceased person falls on the deceased individual's executor. They are legally appointed to administer the deceased person's estate and handle various financial matters, including taxes.

The responsibility for filing the return continues until the estate is settled, and all outstanding taxes are paid.”

Your executor (or “personal representative”) will normally be a relative or a trusted friend. You can appoint whoever you’d like to be an executor in your will.

But if you fail to name an executor (or die without a will), your estate will pass to a state probate court. From there, the court will appoint its own executor to assess your assets and submit any outstanding tax information to the IRS.

What Is the Process of Submitting the Tax Return of Someone Who’s Died?

Once an executor has been appointed (if necessary), the decedent’s tax return can be completed and submitted to the IRS.

According to the IRS, the rules and processes around preparing someone’s tax return work the same whether they’re dead or alive. You’ve got to download and complete IRS Form 1040, or if they were a senior citizen over the age of 65, use IRS Form 1040-SR.

If you were the estate’s executor or the surviving spouse, you then complete this form on behalf of the person who’s died in the standard way. You must report all income, claim any eligible credits and record valid deductions. The only material difference is you’re only entering this information up to the date of the person’s death.

The typical IRS deadlines will apply to the filing of any decedent’s tax return.

According to Whitney Sorrell, Principal Attorney and CPA at Sorrell Law Firm, the executor of an estate might also need to submit proof they’ve been appointed as the decedent’s personal representative. She explains:

“IRS Form 56 Notice of Fiduciary Relationship tells the IRS the Personal Representative is the responsible person for filing the tax return for the decedent.”

By submitting this form alongside the decedent’s 1040, the speed at which the tax return gets processed will be way faster.

Likewise, it’s also possible to speed up the distribution of any outstanding tax return by sending in IRS Form 1310 alongside the decedent’s 1040.

Martin Gasparian, an attorney and owner of Maison Law, explains:

“The filing of IRS Form 1310 is an effective form that helps in claiming refunds for deceased persons.

The filing of Form 1310 discloses whether the deceased person left any will or the appointment of a personal representative responsible for claiming tax refunds.”

It’s important to remember no refunds will be issued to beneficiaries until any tax owed has been fully paid.

When filing a decedent’s tax return, the key is to ensure you have all the correct and relevant information at hand. That means receipts, bank statements, and documentation of any deduction of credits they may have been eligible for before they died.

That’s where a Family Operating System® like Trustworthy can streamline the filing process.

By uploading digital copies of essential documents onto Trustworthy, you can collaborate and securely share that documentation with all relevant parties, including your accountant, financial planner, or court-appointed executor.

This ensures you always have the correct documents available to submit the right tax information and initiate the refund process.

Who Pays Taxes Owed by Someone Who's Passed Away?

“Taxes owed by a deceased person are generally paid from the assets of the deceased individual's estate,” explains Kellzi.

He continues:

“However, if there are insufficient assets in the estate to cover the tax liabilities, the executor or personal representative may not be personally liable for the outstanding taxes.”

That’s good news if you’re the executor of the estate but not terribly promising if you’re a beneficiary hoping for a refund. 

Here’s how it works in practice: If you’re the executor of an estate, you need to submit payment alongside the decedent’s tax return. You can also arrange one of several other payment options.

If the decedent’s estate doesn’t have enough assets to cover their tax bill, the IRS will credit the decedent’s account with any outstanding refunds. Once this amount is removed, the executor needs to liquidate the assets in the decedent’s estate and pay as much as possible to the IRS.

The IRS always gets priority over other creditors when settling the deceased person’s debts.

The only situation in which a personal representative might end up responsible for paying the difference between tax owed and the assets in an estate is if they’ve distributed assets to beneficiaries knowing there was an unpaid tax liability.

Who Gets the Tax Refund of a Deceased Person?

Once the IRS has received any debts owed, a refund on behalf of the decedent can finally be issued.

Kellzi notes:

“The tax refund of a deceased person becomes part of their estate. If the deceased individual had a will specifying beneficiaries, the refund will be distributed according to those instructions.

“If there is no will, state laws of intestacy determine how the assets, including the tax refund, are distributed to the deceased person's heirs.”

That means if you’ve named beneficiaries in your will, the will’s executor can distribute your tax refund to those beneficiaries after the IRS has paid it into your estate. Typically, this is your surviving spouse, children or grandchildren.

If you haven’t left a will, the executor appointed by a state probate court will typically try to find and contact your closest living relative to distribute the refund. Each state has a slightly different process to identify and distribute the contents of an estate if you die intestate (without a will).

Frequently Asked Questions

How Do I Claim Tax Back for a Deceased Person?

To claim the tax refund of someone who’s died, you must submit IRS Form 1310 alongside their annual tax return.

Do Executors Have to File a Tax Return?

Yes. If a decedent filed their taxes as an individual, the executor of their estate is responsible for filing the return on their behalf.

When Does the IRS Submit the Refund Of Someone Who’s Died?

After the IRS has received Form 1310 and outstanding tax liabilities have been settled, any remaining refund will be paid into the decedent’s estate.