IRS and State Revenue Departments
IRS and State Taxes After Death: What You Need to Do and Why It Matters
When someone passes away, their tax obligations do not simply end. Handling final tax matters is a critical responsibility for the executor or anyone managing the estate. Failing to take these steps can result in delays in closing the estate or lead to penalties later.
Here is the issue: Taxes must still be settled for the deceased, and in some cases, for the estate itself. This often involves filing final income tax returns and obtaining a special tax ID for the estate if it generates income after the death.
Steps You Need to Take Next:
Filing the Final Income Tax Return
The first step is to make sure a final federal income tax return (Form 1040) is filed for the year of death. This return covers income earned from January 1 of that year up to the date of death.
The filing deadline is the same as for any other individual return, typically April 15 of the following year. If the deceased was married, the surviving spouse can often file a joint return for that year.
Income that must be reported can include wages, Social Security benefits, retirement income, or investment earnings. If a refund is owed, it can still be claimed, but if you are not the surviving spouse, you may need to file IRS Form 1310 to receive it.
For help with IRS forms or questions:
• Visit irs.gov
• Call 1-800-829-1040 for IRS assistance
Estate Income and the EIN
If the estate itself earns income after the death, such as interest, dividends, rent, or gains from the sale of property, a separate return may be required. This is the IRS Form 1041, the income tax return for estates and trusts.
To file Form 1041, the estate will need an Employer Identification Number (EIN). This is a unique tax ID for the estate, different from the deceased’s Social Security number.
You can apply for an EIN online at irs.gov under the Apply for an Employer Identification Number (EIN) Online section.
Not all estates need to file Form 1041. If the estate does not earn income and is simply distributing property, you may not need an EIN at all.
State Tax Considerations
States have their own rules for final income tax returns and estate or inheritance taxes. Many states require a final state income tax return for the year of death. Some states also impose separate estate or inheritance taxes with different forms and deadlines.
Check with your state’s Department of Revenue to understand the requirements in your jurisdiction. Many have websites with specific guidance and contact numbers.
In Louisiana, a final state income tax return must be filed for the deceased if they were required to file while they were alive. This return covers the period from January 1 through the date of death. The return is due by May 15 of the following year and should be filed using Form IT-540 for residents or Form IT-540B for part-year or nonresidents.
Louisiana does not impose a separate state estate tax or inheritance tax. However, succession proceedings are required to transfer assets from the deceased to their heirs. If the estate is earning income after death, you may also need to file a fiduciary income tax return (Form IT-541) on behalf of the estate.
You can find forms, instructions, and additional guidance on the Louisiana Department of Revenue website:
- Visit: www.revenue.louisiana.gov
- Or call: 1-855-307-3893
If you’re unsure which forms apply or whether the estate owes anything to the state, consider speaking with a Louisiana probate attorney or tax professional familiar with local requirements.
Bottom Line:
• File the final federal income tax return (Form 1040) by April 15.
• Obtain an EIN if the estate earns income and file Form 1041 as needed.
• Check with the Louisiana Department of Revenue for forms, deadlines, and guidance at www.revenue.louisiana.gov or call 1-855-307-3893.
•When in doubt, consider consulting a CPA, tax preparer, or probate attorney to ensure everything is done correctly.
Taking these steps will help you close the estate properly and avoid future problems.
