Final Paychecks, Refunds, and Other Money Owed After a Death

Alongside the bills, there’s often money coming the other way after a death: a last paycheck, a tax refund, a refunded deposit. It’s easy to miss, and each type has its own rules about who can claim it and what you’ll need. Here are the main ones.

Who gets a deceased person’s final paycheck?

It depends on state law. The Tennessee Department of Labor, for example, explains that under certain circumstances state law lets an employer pay the last wages and other benefits to a surviving spouse or children without a court order. SHRM notes that because state law largely controls, the answer varies, but generally the payment goes either to a surviving spouse or to the deceased’s estate, and many states, especially where there’s no will or probate, allow all or part of the wages to be paid directly to a surviving spouse, often with a cap, using an affidavit or written request. Federal law doesn’t set a uniform rule.

California illustrates the pattern: Probate Code sections 13600 to 13606 let an employer pay a surviving spouse the deceased’s earned salary or other compensation, including unused vacation, up to a statutory limit, once the spouse provides a sworn statement. Above the limit, or when someone other than a spouse is claiming, an employer may need formal estate papers such as letters from the court (see letters testamentary) or a small-estate affidavit.

What should I ask the employer for?

Contact the employer’s HR or payroll department and ask, in writing:

• What final pay is owed: wages through the date of death, any unpaid commissions or bonuses, and unused vacation or paid time off
• Whether state law or company policy provides for paying out unused leave
• Who they can pay under your state’s law, and what documents they need (typically a death certificate and an affidavit, or letters if the estate is being administered)
• What else the employer is holding: group life insurance, retirement plan benefits, and final tax forms

See our guide on notifying an employer. If no one claims the wages, they may eventually be turned over to the state as unclaimed property.

What about the final tax refund?

The final income tax return is prepared much as if the person were alive and is due on the usual date, according to the IRS. If a refund is due, the IRS says a surviving spouse filing a joint return or an appointed personal representative generally signs the return; where there is neither, a person claiming the refund may need to attach Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer. The IRS also says it doesn’t need a copy of the death certificate with the return. See taxes and benefits after a death.

What happens to Social Security payments?

Social Security works against families here, which surprises many people. USAGov explains that Social Security can’t pay benefits for the month of a recipient’s death. Because each payment covers the previous month, a payment that arrives the month after the death is for the month of death and has to be returned: if the person died in July, the August payment is returned. For a direct deposit, notify the bank as soon as possible and ask it to return the payment for the month of death and any later ones.

The death should be reported by phone or in person, since SSA doesn’t accept reports online or by email: call 1-800-772-1213, or give the person’s Social Security number to the funeral director, who can report it.

What is the $255 Social Security death payment?

A one-time lump-sum death payment of $255 may be paid to certain survivors. SSA’s policy notice gives the order of priority: first a surviving spouse who was living in the same household as the worker at the time of death; then a spouse who was entitled to or eligible for monthly benefits in the month of death; then a child who was entitled to or eligible for benefits that month, with qualifying children sharing equally. The application must be filed within two years of the death, though that can be extended for good cause. It isn’t an estate asset; it goes to those survivors. Spouses and minor children may also qualify for ongoing survivor benefits; see the SSA’s survivors page.

What other money might be owed?

Think through where the person paid a deposit, prepaid, or overpaid:

• Refunds and deposits such as utility deposits, security deposits, insurance premium refunds, and prepaid subscriptions or memberships
• Uncashed checks from before the death, which may become unclaimed property
• Benefits and plans through a former employer, union, or pension; see how to find everything a person owned
• Dormant accounts that the state holds, which the Maryland Comptroller notes heirs can claim, in nearly every state with no time limit

Checks made out to the deceased generally need to go into an estate account rather than your personal one; ask the bank what it requires, and see our guide on letters testamentary.

Who should claim what?

If there’s an executor, route anything owed to the estate through them, so it’s counted and handled in the right order. If there’s no formal estate, many items can be claimed by a surviving spouse or heirs with an affidavit; ask each payer what it accepts. Keep a list of what you’ve claimed and when, as in our asset search guide.

For dormant accounts and uncashed checks, see unclaimed property after a death and old bank accounts and safe deposit boxes.

For how final returns and refunds work, see final tax returns after a death.

For a step-by-step checklist with links to each official search, use our interactive Find the Money checklist.

This is general educational information, not legal or tax advice. Rules on final pay, who may claim it, and caps on direct payment vary by state, and benefit rules change - the employer, the IRS, the Social Security Administration, and an estate attorney can address your specific situation.