23 Mar What tax forms do I have to file for my sister who died?

Q. My sister died last July 2020 before she was able to file her taxes. I am taking care of her estate. Do I need to file her taxes? She was receiving retirement and disability.
— Executor

A. We’re sorry to hear about your sister.

Executors must file final federal and New Jersey income tax returns for the calendar year in which the person died if the deceased person received at least the minimum amount of income set by federal law that year, said Shirley Whitenack, an estate planning attorney with Schenck, Price, Smith & King in Florham Park.

She said withdrawals from tax-deferred investments such as IRAs, 401(k)s and 403(b)s are subject to income tax in the year that withdrawals are made. Pensions are also subject to income tax, she said.

“Social Security Disability (SSDI) benefits may be taxable if the person had other income that exceeds the minimum threshold,” she said. “Such benefits will not be taxed if half of the disability benefits added to all other sources of income, including tax exempt income, is below $25,000 for a single person.”

Supplemental Security Income (SSI) benefits are not taxable, she said.

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This story was originally published on March 23, 2021.

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