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Do social security checks become part of a taxable estate?

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    Since I've been doing some reading here and there on estates and estate tax , I was curious about something. I wondered what would someone have to do if they received a social security check for a loved one who had already passed away. Would the check become part of the estate? Well, I think I found an article which gives the skinny on the matter.

    From what I can see, the taxation of the check depends solely on why the check was issued in the first place. The estate can only keep the check if it was sent to resolve an underpayment of benefits. If this is the case, the money received from the SS check, then, in turn, becomes part of the estate, making it taxable under the estate tax. Granted, the estate is not taxable if its value doesn't exceed $5,450,000 or $10,900,000 if exemption portability is in place. If the check was for the month the person died, then it cannot become part of the estate and has to be sent back to SSA. Apparently, the decedent must be alive for the entire month the check was issued.

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    That is an interesting question. Extremely likely that 99% of us in that situation wouldn't have to worry about the estate tax of 40% being taxed on the last SS check. But, it does bring up the question of what happens to SS benefits when someone passes away, mainly the last check. Makes sense that it then becomes part of the estate, and has to be dealt with via the family in that matter. Never thought of that before.

  • Are you sure you want to delete this post?
    It's a very niche concept, but I think it's worth musing over.