How long does it take to get a tax refund for a deceased person

Nothing is certain except death and taxes—and the headaches that result when the two intersect. Rarely do people die with their finances neatly tied up, and one of the frequent issues that arises is the matter of the deceased person’s (decedent’s) last income tax refund.

If a person dies being owed an income tax refund (as thousands of people do every year), what happens to the money? Obviously, the decedent cannot cash a check made out to him or her. A refund in the sole name of the decedent is an asset of the decedent’s estate. Eventually, it will be distributed to the decedent’s heirs or beneficiaries (assuming there is money left in the estate after all legitimate debts are paid). But what happens in the meantime? And what if the tax refund is from a tax return jointly filed with a spouse?

Tax Refunds for Jointly Filed Income Tax Returns When One Spouse Has Died

When one spouse has died, the surviving spouse can file a joint income tax return for the tax year in which the deceased spouse died. The surviving spouse needs to indicate on the tax return that their spouse is deceased. According to the Internal Revenue Service, the surviving spouse should write this notation above the area on the return where the address is entered. The notation should state the word “DECEASED,” the deceased spouse’s name, and the date of death.

If the surviving spouse is filing a joint income tax return, but no personal representative has yet been appointed for the decedent’s estate, the survivor should sign the return in their own name. In the signature area below their signature, they should again sign and print “filing as surviving spouse.”

If a personal representative has been appointed in the decedent’s probate matter, the personal representative should sign the return together with the surviving spouse. The address of the surviving spouse and the decedent’s last address must, of course, also be on the return.

Of course, many people file their income tax returns electronically these days, and this is still possible in the case of a joint return with a deceased spouse. Tax preparation software typically prompts a user to indicate whether the spouse is deceased and then directs the user accordingly regarding notation and signature requirements.

It’s not terribly common, but what happens if the surviving spouse remarries before the end of the year in which the deceased spouse died? In that case, the surviving spouse may not file a joint income tax return with the deceased spouse. Instead, whoever files the return on behalf of the deceased spouse would do so under the filing status “married, filing separately.”

Claiming Tax Refunds Due to a Deceased Taxpayer

If the deceased taxpayer was not married, the personal representative of their estate (if there is one) should file the income tax return. If a personal representative has not been appointed, a survivor of the deceased can file, noting on the return that the taxpayer is deceased.

If a tax refund is due to a deceased taxpayer, there may be another step to take. The person filing the income tax return should also file IRS Form 1310, Statement of a Person Claiming Refund Due a Deceased Taxpayer.

The Internal Revenue Service does not require surviving spouses to file Form 1310 in order to receive the tax refund, many tax preparers recommend filing it anyway. The form does have a box to check if the filer is a surviving spouse, and filing the form could help to prevent delays in processing the refund. Also, if a surviving spouse has received a refund check made out jointly to the surviving spouse and the deceased spouse, the survivor can return the check along with Form 1310. A new check will be issued in the name of the surviving spouse.

The form is brief, and requires filers to disclose whether the decedent left a will; whether a personal representative has been appointed in the decedent’s estate, and if not, whether one is going to be appointed.

Form 1310 also asks the person completing the form to indicate whether they intend to pay out the tax refund according to the laws of the state where the decedent was a legal resident. If the person filing the form answers “no” to that question, a refund cannot be issued until the filer presents a court certificate showing that they have been appointed personal representative of the estate, or other documentation that they are entitled under state law to receive the refund.

If you are a surviving spouse or the personal representative of an estate and have questions about the decedent’s income tax filings or tax refund, contact a probate attorney experience in tax law to schedule a consultation. Death and taxes are certain. What to do after a death may not be. An attorney can help.

How do I find out if there are any outstanding issues with the deceased’s tax affairs?

The first thing to understand is that there may be more than one tax year that needs to be dealt with. For example, if someone dies on 30 April 2022, it is unlikely that their tax affairs for the tax year 2021/22 (that ended on 5 April 2022) would have been finalised, while there is also the short period from 6 to 30 April 2022 in the tax year 2022/23 to be considered.

The personal representative should contact HMRC’s bereavement service and ask which tax years need to be finalised and to find out if HMRC believe any information is outstanding.

If the deceased was employed, retired or on welfare benefits in the tax year that they died, HMRC should be able to confirm taxable figures for those sources to the personal representative.

Where can I get information on the sources of income and gains that the deceased had?

HMRC will be able to give you some information (see above), but when you go through the deceased’s personal information you may well find bank statements, payslips, advice notices about pensions or state benefits, dividend vouchers, stockbrokers’ statements or interest certificates from banks and so on. Identifying all sources of income is key to being able to finalise the individual’s income tax position up to date of death.

The sources of this income (for example, the bank balance giving rise to the interest or the share portfolio giving rise to dividend income) will also give you information to help establish the overall value of the estate.

Increasingly, many details will only be available electronically, and the executor may have to hope that passwords are available to access the required information. Once a source has been identified, the executor should be able to obtain the information needed to value the underlying capital value for the estate and to take possession of the asset so that it may be distributed to the beneficiaries in due course.

If you have used the Death Notification Service, they may be able to tell you the balances on various accounts and any interest credited to the accounts.

Where you have evidence that the deceased had sold an asset, you may also need to consider capital gains tax.

What income is taxable when it is shared with someone else?

You can read about this on our page What happens to property owned jointly by the deceased and someone else?

Do self assessment tax returns need to be prepared for the deceased?

Not always. If HMRC have issued tax returns then they do need to be completed unless you contact HMRC and they agree to cancel them. But, otherwise, you can check guidance on GOV.UK to see whether tax returns need to be completed. It is the personal representative’s duty to make sure that all relevant income and gains have been reported to HMRC.

Who signs the tax returns?

If tax returns are needed, they need to be signed by the personal representative.

If no tax return is needed, how is the deceased’s tax position finalised?

HMRC will send a letter to the personal representative or – if not known – the last known address of the deceased. The letter should explain the process of reconciling the tax affairs of the deceased up to the date of death and that a P800 tax calculation (or a Simple Assessment) will be sent, once HMRC have received the final income and tax information from the pension providers, employers, Department for Work and Pensions (DWP), etc. The personal representative should advise HMRC of any savings or property income or capital gains.

Be aware that the deceased may have more than one tax year to be reconciled, especially if they had been ill and had neglected their tax affairs for some time.

A full personal allowance is available for the tax year of the death to set against income arising before the date of death. If the deceased had earnings or pensions that were taxed under Pay As You Earn (PAYE), it is likely that they will have paid too much tax in the tax year of their death. This is because under PAYE, you are only given part of your tax-free personal allowance each month as the system assumes that you will be paying tax evenly across the entire year. When HMRC issue the P800 tax calculation (or Simple Assessment), it will show any refund due. More rarely, there is an underpayment of tax that will need to be paid out of the deceased’s estate.

The personal representative must check the P800 tax calculation (or Simple Assessment) against the deceased’s records. If they cannot agree with it, they should contact HMRC as soon as possible. You can read more about checking forms P800 in our Employment section.

Otherwise, HMRC should give information about when and how the repayment is to be made, or how payment of any amount owing to them is to be made.

Who pays any tax that is due?

Tax up to the date of death should be paid out of the assets of the estate by the personal representative. A bank may be prepared to make payment direct to HMRC for this purpose; if there are no funds available, for example because probate has not been granted, the personal representative may need to arrange a loan to pay the tax due.

Who receives any tax refund that is due?

The refund will be payable to the estate.

What are the time limits for finalising the tax affairs of the deceased?

Any tax returns that have been demanded by HMRC should normally be filed by 31 January following the end of the relevant tax year. So:

• a tax return for the tax year 2021/22 is due to be filed electronically by 31 January 2023;
• a tax return for the period from 6 April 2022 to the date of death in 2022/23 is due to be filed electronically by 31 January 2024.

However, we understand that where there are outstanding tax returns for the deceased, HMRC advises executors to contact them. HMRC should then cancel any outstanding tax returns that were issued to the deceased and re-issue them to the personal representative, together with a tax return to the date of death.

HMRC will not accept electronic tax returns from personal representatives for deceased taxpayers. Paper tax returns therefore have to be filed.

HMRC will usually give a deadline of 3 months and 7 days for the executors to submit any re-issued tax returns. HMRC’s guidance (see HMRC’s Self Assessment manual SAM90010) also indicates that if an executor has difficulty meeting this deadline, they may agree an alternative reasonable filing date.

By way of an example, let’s say Alfred passed away on 1 December 2022. He had not yet filed his 2021/22 tax return which was due for submission online by 31 January 2023. John, Alfred’s son, is his  personal representative. John should contact HMRC about the outstanding tax return. HMRC should then cancel the original 2021/22 tax return issued to Alfred and re-issue John with a paper 2021/22 tax return. John will then have 3 months and 7 days to file the re-issued return. HMRC may also issue John with a tax return for the period 6 April 2022 to 1 December 2022 to declare Alfred’s income in the 2022/23 tax year up to the date of his death.

HMRC’s guidance (see SAM90010) also confirms that late-filing penalties issued to the deceased should be cancelled.

Again, by way of an example, let’s say that Mark died on 15 March 2022. His 2020/21 tax return had not been filed, so HMRC had sent him a late-filing penalty. HMRC should cancel the late-filing penalty and re-issue the 2020/21 tax return to Mark’s executor to complete, together with a tax return to the date of Mark’s death.

It makes sense to try and finalise the tax position of the deceased as soon as possible. You can ask HMRC to confirm that there are no further outstanding issues.

Where can I get help and further information?

See our separate page Getting help with bereavement and inheritance tax.