How to Issue a W-2 to a Deceased Employee in Texas - Proper Procedures

Yes, you definitely need to issue a W-2 for a deceased employee. The IRS requires W-2s for all employees who received wages during the tax year, regardless of whether they're still living at the time of issuance. For a deceased employee, you should prepare the W-2 as you normally would, but with a few important differences. Write "DECEASED" on the form and include the date of death. The deceased employee's final W-2 should report all wages paid before and after death. Any wages paid after death should be reported on Box 3 (Social Security wages) and Box 5 (Medicare wages) only if paid within the same calendar year as the death. As for where to send it, the W-2 should go to the estate's legal representative, which could be the surviving spouse, the executor of the estate, or the administrator. In Texas, if they were legally married (whether by ceremony or common law), the surviving spouse is typically entitled to receive this information. Common law marriage in Texas is legally recognized when a couple agrees to be married, lives together in Texas as husband and wife, and represents themselves to others as married. You don't necessarily need to request a marriage license, but you might want to have the spouse sign a simple affidavit stating their relationship status for your records.

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As the executor for my sister's estate (she passed in Texas), I just went through this. Make sure you mark the W-2 as "DECEASED" and include the date of death. Also, double check how you're handling any payments made after death - those are considered income to the beneficiary/estate, not the deceased, and have different tax rules. For the marriage question - Texas does recognize common law marriage but there are specific requirements. Maybe have the husband sign a simple statement confirming they presented themselves as married to the community? That would cover your bases.

I work in payroll and deal with this regularly. One thing nobody's mentioned - if the employee had any accrued vacation payout or final wages paid AFTER death, those should be treated differently tax-wise. Those payments go on a 1099-MISC to the estate or beneficiary, not on the W-2. Also, ask for the death certificate copy for your records - you'll need it. In Texas, if they're claiming common law marriage, have them complete a Declaration of Informal Marriage form (it's a Texas state form) if they haven't already filed one with the county clerk.

I'm sorry for your loss and the difficult situation you're navigating. This is definitely a complex area that requires careful attention to both federal and Texas state requirements. A few additional points that might help: **Timing considerations:** Since it's already December and the husband is asking about the W-2, you might want to proactively communicate the standard January 31st deadline for W-2 distribution. This can help manage expectations while you're gathering the proper documentation. **Documentation for common law marriage:** In addition to what others mentioned, Texas recognizes common law marriage if three elements are met: (1) they agreed to be married, (2) lived together in Texas as spouses, and (3) represented themselves publicly as married. Evidence could include joint utility bills, insurance policies listing each other as spouses, joint bank accounts, or sworn affidavits from friends/family who knew them as a married couple. **Estate considerations:** Even if you determine they weren't legally married, the W-2 still needs to be issued - it would just go to whoever is handling the estate (could be a parent, sibling, or court-appointed administrator). **Record keeping:** Make sure to document whatever verification process you use for your company's records. This protects you if questions arise later from other family members or during any potential audit. Consider reaching out to your company's legal counsel or tax advisor if you have access to one, especially given the complexity around the marriage status verification.