How to Handle a Tax Refund Check for My Deceased Father - Questions About Taxable Interest and Depositing

I've helped several family members with estate matters, so I can share what I know. Yes, you're right about the refund portion - that's not taxable as it's simply money that was overpaid to the IRS. However, the interest portion is considered taxable income. The IRS adds interest when refunds are delayed, and that interest is taxable in the year you receive it. As for depositing the check, since the estate has been closed, you generally have two options. If you were the sole beneficiary, you can usually endorse the check with "For Deposit Only" and deposit it into your account. If there were multiple beneficiaries, you might need to work with them to properly distribute the funds.

I went through something similar with my mom's estate last year. I found this amazing tool called taxr.ai (https://taxr.ai) that really helped me figure out how to handle the estate tax stuff. I was super confused about the refund and interest issues just like you, and I uploaded the refund check and estate documents to get clarity. They analyzed everything and gave me a detailed explanation of how to handle both the deposit and the tax reporting requirements for the interest. Saved me so much confusion!

I wanted to follow up on my skepticism about taxr.ai (https://taxr.ai). After our exchange, I decided to try it myself with my aunt's estate situation. I was honestly surprised by how thorough the analysis was. It even identified an obscure state-specific rule about estate refunds that applied in my case and saved me from making a mistake. The platform generated all the documentation I needed for each beneficiary explaining their portion of the interest income. Really helpful and definitely worth using for anyone dealing with deceased tax matters.

If you're still waiting for answers from the IRS about this refund check situation, I'd recommend trying Claimyr (https://claimyr.com). When my father passed and I had questions about his final tax return and refund check, I spent DAYS trying to get through to the IRS on the phone with no luck. Claimyr got me connected to an actual IRS agent in about 15 minutes who walked me through exactly what to do with the check and how to report the interest. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c

I have to admit I was totally wrong about Claimyr. After posting my skeptical comment, I was still struggling with a similar situation for my grandfather's estate and getting desperate after weeks of trying to reach the IRS. I tried the service and got connected to an IRS representative in about 20 minutes. They confirmed that as executor I could deposit the check by endorsing it with "For deposit only" followed by my signature and "executor of the estate of [name]". They also explained exactly how to report the interest on my 2025 taxes with the proper forms. Saved me weeks of frustration!

When my mom passed last year, I wrote "VOID" on the check and sent it back to the IRS with a letter explaining the estate was closed. They reissued it with just my name on it. That might be another option if your bank gives you trouble with the current check.

Be careful!! Interest on tax refunds is reported on a 1099-INT and the IRS will be looking for someone to pay taxes on it. I got audited last year because I didn't report the interest on my deceased uncle's refund check that I deposited after his estate closed. Make sure you keep all documentation showing you were the executor too!

Just to add another perspective - I handled my grandmother's estate in 2023 and ran into a similar situation. The key thing I learned is that you need to be very careful about how you endorse the check. I used "Pay to the order of [My Name], Executor of the Estate of [Deceased's Name]" and included my executor documentation when depositing. Most banks will accept this if you bring a copy of your letters testamentary or similar executor documentation. The interest portion will indeed be taxable to you as the recipient, and you'll need to report it on your 2025 return when you receive the 1099-INT. One other tip - call your bank first to ask what their specific requirements are for depositing estate checks. Some banks have internal policies that are more restrictive than others, and it's better to know upfront rather than having the check rejected.

I'm currently dealing with a very similar situation with my late mother's estate. Based on what I've learned through the process, here are a few additional considerations that might help: 1. **Documentation is key** - Even though your estate account is closed, keep all your executor documentation handy. Some banks will still honor the check if you can prove you were the legal executor, but policies vary widely between institutions. 2. **Consider the timing** - Since this refund took nearly 3 years to arrive, the IRS likely added significant interest. Make sure you're prepared for that tax impact when you file your 2025 return. 3. **State considerations** - Don't forget that some states have their own rules about handling deceased taxpayer refunds. If your father owed state taxes or had state refunds pending, you might encounter similar issues there. 4. **Future planning** - If you're still handling any other aspects of the estate, consider setting up a simple checking account specifically for these late-arriving items. I wish I had done this because we ended up getting several unexpected payments over two years after we thought everything was settled. The endorsement method that James mentioned worked well for me too. Just be prepared that some bank tellers might not be familiar with estate check procedures, so you may need to speak with a manager.

As someone who works in banking and has helped many customers with estate-related deposits, I wanted to add a practical perspective to this discussion. The endorsement suggestions from James and others are spot-on, but I'd also recommend bringing multiple forms of documentation when you visit the bank. In addition to your letters testamentary, bring a copy of the death certificate and the original tax return that generated this refund. This helps the bank verify the legitimacy of the transaction and can speed up the process significantly. One thing I haven't seen mentioned yet is that some banks have specific "estate services" departments that are much better equipped to handle these situations than regular tellers. If your bank offers this, ask to speak with them directly - they'll often have streamlined procedures for exactly this type of delayed estate payment. Regarding the tax implications that others have discussed, you're absolutely right that the interest portion will be taxable to you. Just make sure you keep a copy of the check and any documentation showing the breakdown between the original refund amount and the interest, as this will be helpful when preparing your 2025 tax return. The 3-year delay on this refund is unfortunately not uncommon, especially for returns filed after the deadline. The IRS has had significant processing backlogs, and estate-related returns often get additional scrutiny that slows things down even further.

I'm dealing with a somewhat similar situation with my mother's estate, though thankfully not quite as delayed as yours! From my experience so far, I'd recommend calling the bank where you want to deposit the check BEFORE going in person. When I called my bank's customer service line, they were able to tell me exactly what documentation I'd need and even set up an appointment with someone who specializes in estate matters. This saved me from making multiple trips with incomplete paperwork. Also, regarding the taxable interest - I found it helpful to take a photo of both sides of the check before depositing it, since the interest amount breakdown might not be clearly preserved in your bank records later. You'll want that information when tax season comes around. One question for the banking professional who commented - do you know if there's a time limit on how long after someone's death the IRS can issue refund checks? I'm wondering if there might be other delayed refunds coming that I should be prepared for.

I'm going through something very similar with my stepfather's estate right now - he passed in early 2022 and I just received his refund check last month with substantial interest attached. One thing I learned that might help you is to check if the check has an expiration date. Treasury checks typically expire after one year, but refund checks sometimes have different rules. If yours is close to expiring, you'll want to act quickly. For the deposit issue, I ended up going with the approach Ben Cooper mentioned - I called the IRS and requested they reissue the check in my name as executor. It took about 10 weeks, but it eliminated all the banking complications. The customer service rep told me this is actually pretty common for estates that have been closed for a while. The interest portion definitely goes on your personal tax return for 2025. I asked my tax preparer about this, and she said to make sure you keep the original check stub or take a clear photo showing the interest breakdown, since that amount needs to be reported separately from the main refund. Also, don't be surprised if you get a 1099-INT issued under your father's name and SSN rather than yours - apparently this happens frequently with deceased taxpayer interest. Just make sure you claim it on your return anyway to avoid any matching issues with the IRS computers.

I'm currently going through executor training through my local bar association, and this thread has been incredibly educational! One thing I wanted to add that I haven't seen mentioned yet is the importance of notifying your homeowner's or renter's insurance about receiving estate-related checks. My instructor mentioned that some policies have coverage for lost or stolen financial instruments, but they may require notification when you're handling estate assets that exceed certain amounts. Given that this refund includes several years of interest, it could be a substantial sum. Also, regarding the banking situation - if your primary bank gives you difficulty with the deposit, consider trying a credit union if you have access to one. In my experience, credit unions often have more flexible policies for estate-related transactions and their staff tends to be more willing to work with unusual situations. One last thought - since this refund was so delayed, you might want to check if your father had any state income tax returns that could result in similar delayed refunds. State processing can be even slower than federal, and you don't want to be caught off guard by another unexpected check months or years from now.

This has been such a comprehensive discussion! As someone who recently went through a similar situation with my aunt's estate, I wanted to share a few additional tips that might help: First, before you decide whether to deposit the check as-is or request a reissue, call your bank and ask specifically about their "estate check endorsement policy." Some banks have updated their procedures in recent years to be more accommodating, while others have become stricter. Getting this information upfront can save you time and potential embarrassment at the teller window. Second, regarding the interest taxation - something that helped me was creating a simple spreadsheet to track all estate-related income and expenses throughout the year. Even though your estate is officially closed, you may still encounter other delayed payments or documents, and having everything organized will make tax preparation much smoother. Finally, consider reaching out to the probate court where the estate was handled. Sometimes they can provide a certified copy of your final estate closing documents, which can be helpful as additional proof of your authority if banks or other institutions question your ability to handle these delayed payments. The fact that this refund took nearly 3 years to arrive really highlights how important it is to keep estate documentation accessible even after you think everything is finished. Thanks to everyone who shared their experiences - this thread should be really helpful for anyone dealing with similar situations!

I'm dealing with a very similar situation right now with my mother's estate, so I really feel for you! The confusion and stress of handling these unexpected financial matters months or years after you thought everything was settled is really overwhelming. From what I've learned through my own experience and reading through this excellent discussion, here are the key points I'd focus on: 1. **Check expiration first** - As Freya mentioned, verify if there's an expiration date on the check. This should be your immediate priority since it affects all your other options. 2. **Bank consultation** - Call your bank's estate services department (if they have one) before going in person. Explain your situation and ask about their specific requirements. This can save you multiple trips. 3. **Endorsement approach** - If you decide to deposit as-is, use the endorsement format several people mentioned: "Pay to the order of [Your Name], Executor of the Estate of [Deceased's Name]" along with proper documentation. 4. **Tax implications** - Yes, the interest is taxable income to you for 2025. Take clear photos of both sides of the check showing the interest breakdown, and be prepared for a 1099-INT that might be issued under your father's name/SSN. 5. **Consider reissuance** - Given that your estate account has been closed for 14 months, requesting a reissued check in your name might actually be the cleanest solution, even though it takes 8-10 weeks. The most important thing is that you're not alone in this - delayed estate refunds with accumulated interest are apparently much more common than any of us realized. Whatever approach you choose, document everything carefully!