When contacted by a department, concerning the death of an employee, the following procedures need to be used to process their final payments:

1. Any payments that are "in process" after the date of death should be stopped; checks should be pulled and held in payroll, direct deposits should be returned if prior to check date.


2. The department should complete the termination paperwork and adjustment vouchers and route to the appropriate offices.



3. The payroll office should fax the 4 documents concerning “Payments after Death” to the department to be given to the family of the deceased. These documents will explain our procedures for making final payments to employees. These documents are:
   
   1. How to Claim a Final Paycheck
   2. Paycheck Claim
   3. Affidavit of No Administration
   4. W-9 Request for Taxpayer Identification Number and Certification
   
   
4. When the adjustment voucher for the final payment from the department is received in payroll, the 45-day waiting period will be calculated from the date of death provided an estate has not been opened. This date will be recorded on the adjustment voucher. The termination should be approved following normal procedures.


5. The vouchers will be kept in a folder, “Pending Death Payments,” in the payroll department by the termination coordinator.


6. Provided an estate has not been opened, payroll will process the final payment upon receipt of the Paycheck Claim , the Affidavit of No Administration , the W-9 Tax form and upon the completion of the 45-day waiting period. In accordance with Indiana law, if an estate is opened and the “Letters of Administration” and W-9 Tax form are received by payroll, the 45-day waiting period does not apply.


7. The final payments must be processed on Disbursement Vouchers. If an estate was opened, the check will be issued “to the estate of” the deceased. If an estate is not opened, the check will be issued to the claimant signing the Paycheck Claim form. Social Security and Medicare taxes will be withheld if the final payment is made in the same tax year in which the death occurred and will appear in boxes 3 and 5 of the employee’s form W-2. If the final payment is made in the year following the date of death, social security and Medicare taxes will not be withheld and will not be reported in boxes 3 and 5 of the employee’s form W-2.


8. Any payments made to the employee with a check date following the date of death should be cancelled and included in the final payment on the Disbursement Voucher.


9. Provide the Retirement Coordinator in FMS with copies of the adjustment voucher for final payments. Retirement contributions will be calculated and wages will be adjusted as needed.


10. Provide the Payroll Tax Coordinator in FMS with a copy of the Disbursement Voucher for final payments. Wages will be adjusted, as needed.


11. Mail the check to the address indicated on the Paycheck Claim form. The same address should also be entered on the YUW4 screen for tax form mailing at year-end.


12. Any outstanding checks with a check date prior to the date of death must be reissued to the survivor. No adjustments are made to wages or tax forms.

Questions concerning this procedure should be directed to:

Linda Morrow, Payroll
Phone: (812) 855-6800
E-mail: lmorrow@indiana.edu
Fax: (812) 856-4452