One company didn’t know what to do about the final paycheck it had already issued before an employee passed away. I’m Amy E. Feldman.
The paycheck of an employee in Providence, Rhode Island arrived after the employee’s sudden death from a heart attack. The company received a call from the employee’s daughter, who asked that they issue a new check in the daughter’s name. The accounting department didn’t know if they could do that.
While the company should check for laws in its state, in general, an uncashed paycheck issued prior to the employee’s death should be canceled, and a new check should be issued in the name of the employee’s estate or beneficiary with the same amount of taxes withheld as the old check. If the last paycheck hadn’t been cut before the employee’s death, the final wages should be made out to the deceased employee’s estate. Those wages wouldn’t be subject to Federal Income Tax Withholdings, but they are subject to FICA and FUTA taxes, because as we know, both death and taxes are inevitable.