Decedent interest is interest income that was earned by a person who has passed away but is reported to another taxpayer, such as a surviving spouse or the parent of a deceased child. In many cases, you'll encounter decedent interest when a financial account was jointly owned or when interest income is reported after the account owner's death.
Because the income may be reported under a taxpayer identification number that differs from the person who actually earned the interest, special reporting may be needed to ensure the income is taxed correctly.
For example, a surviving spouse may receive a Form 1099-INT that includes interest attributable to a deceased spouse. In that situation, the interest that belongs to the deceased individual may need to be reported separately from the surviving spouse's taxable interest.
How Do I Report Decedent Interest in the Program?
- Go to Federal.
- Select Income – Select My Forms.
- Choose 1099-INT, DIV, OID.
- Answer Yes to the question: "Did you earn any interest or dividend income from a bank, brokerage firm, or other financial institution?"
- Select Interest Income (Form 1099-INT).
- Enter the amount reported in Interest Income (Box 1).
- Enter the applicable amount in the Decedent Interest field.
Where Will Decedent Interest Appear on My Tax Return?
When Might Decedent Interest Apply?
- You're a surviving spouse who received a Form 1099-INT that includes interest belonging to a deceased spouse.
- You're filing on behalf of a deceased taxpayer.
- Interest income was reported after the account owner's death but before the account was transferred or closed.
- A financial institution issued a Form 1099-INT that includes income attributable to both a living and deceased taxpayer.