"Ennsylvania Small Estate Affidavit"
MANAGEMENT 315.13 Amended DIRECTIVE Number COMMONWEALTH OF PENNSYLVANIA GOVERNOR'S OFFICE Subject: Payment of Wages, Salary, Benefits, and Travel Expenses to Survivors of Deceased Employes By Direction Of: Date: August 19, 1996 Robert A. Bittendender, Secretary of the Budget This directive establishes procedures for paying survivors or personal representatives of deceased employes any wages, salary, employe benefits, or travel expenses due the deceased employes. This amendment clarifies questions concerning payment of salary, leave, and other benefits owed a deceased Commonwealth employe . 1 . PURPOSE. To establish procedures for pay- c . Affidavit to Procure Salary, Wages, or ing a survivor or personal representative of a Employe Benefits Due a Deceased Employe, deceased employe any wages, salary, employe Form STD-142. A Commonwealth of Pennsyl- benefits, or travel expenses due the deceased vania form submitted by the survivor to claim any employe. wages, salary, travel expenses, or employe bene- fits due the deceased employe if the employe was • 2. SCOPE. Applies to all agencies under the a resident of Pennsylvania and whose total entitle- • Governor's jurisdiction and those independent agen- ment did not exceed $5,000. cies whose payrolls are processed on the ICS Personnel/Payroll System. d . Small Estate Decree of Distribution. An orphans' court division order issued in response to 3. DEFINITIONS. a small estate petition for the payment of a gross value not to exceed $25,000 to the parties entitled a . Survivor. A spouse, child, father, mother, thereto. A Small Estate Petition Decree of Distri- or any sister or brother who survives a deceased bution may be issued with or without Letters Testa- employe. mentary, Letters of Administration, or a probated will. b . Personal Representative. A person named in a deceased employe's will as executor of e . Letters of Administration. A document the estate and who qualifies to administer the issued to a person appointed by a court as the estate. Also, a person who qualifies as an admin- administrator of the decedent's estate when a per- istrator of the estate where the decedent has not son dies intestate (i.e., without a valid will). named an executor in a will or the executor named does not qualify to administer the estate, or any f. Letters Testamentary. A document party of interest who has filed a Small Estate Peti- issued to the person named by the decedent in the tion Decree of Distribution. will to be the executor/executrix of the estate. • (Payroll Operations, OB, 717/783-9015 Page 1 of 5 Distribution: B g . Short Certificate. A certificate issued by distribution so made shall constitute sufficient a Registrar of Wills upon the death of an employe authority to all transfer agents, registrars, and stating that the will has been probated and identify- others dealing with the property of the estate to • ing the executor/executrix or, if there is no will, recognize the persons named therein as entitled to naming an administrator of a deceased employe's receive the property to be distributed without estate. A "Short Certificate" takes the place of both administration, and shall in all respects have the Letters Testamentary and Letters of Administration. same effect as a decree of distribution after an accounting by a personal representative. W ithin 4. POLICY. one year after such a decree of distribution has been made, any party in interest may file a petition a . 20 Pa. C.S. Section 3101(a), as amended to revoke it because an improper distribution has by the Act of December 1, 1994, (P.L. 655, No. been ordered. If the court shall find that an 102), states that: "Any employer of a person dying improper distribution has been ordered, it shall domiciled in the Commonwealth at any time after revoke the decree and shall direct restitution as the death of the employe, whether or not a per- equity and justice shall require." sonal representative has been appointed, may pay wages, salary, or any employe benefits due the c . Where total monies due do not exceed • deceased in an amount not exceeding $5,000 to $5,000, payments to survivors will be made upon • the spouse, any child, the father or mother, or any submission of an Affidavit to Procure Salary, Wages sister or brother (preference being given in the or Employe Benefits Due Deceased Employees, order named) of the deceased employe. Any Form STD-142. A survivor may claim any wages, employer making such payment shall be released salary, travel expenses, or employe benefits due to the same extent as if payment had been made the deceased employe using Form STD-142 if the • to a duly appointed personal representative of the total payment does not exceed $5,000. Payment • decedent and he shall not be required to see to should be addressed to the individual who com- the application thereof. Any person to whom pay- pleted the STD-142. ment is made shall be answerable therefore to anyone prejudiced by an improper distribution." d . A Short Certificate or a Small Estate Peti- tion Decree of Distribution is to be used by a per- b . 20 Pa. C.S. Section 3102, as amended by sonal representative, as defined in Section 3.b., of the Act of December 1, 1994, (P.L. 655, No. 102), the deceased employe to claim monies if the total • states that: "When any person dies domiciled in due exceeds $5,000. When a Short Certificate or • the Commonwealth owning property (exclusive of a Small Estate Petition Decree of Distribution is real estate and of property payable under Section issued, Form STD-142 should not be used. Pay- 3101 (relating to the payments to family and ment should be addressed to the party(ies) desig- funeral directors), but including personal property nated in a Small Estate Petition Decree of Distribu- claimed as the family exemption) of a gross value tion. Payment should be addressed to "The Estate not exceeding $25,000, the orphans' court division of (deceased employe's name), (executor's name), of the county wherein the decedent was domiciled Executor," when a Short Certificate is used to make at the time of his death, upon petition of any party distribution. in interest, in its discretion, with or without appraisement, and with such notice as the court e . An Affidavit of Surviving Spouse from a shall direct, and whether or not letters have been state other than Pennsylvania is not sufficient for a issued or a will probated, may direct distribution of survivor to request payments for a deceased the property (including property not paid under employe's wages, salary, or benefits. The sur- Section 3101 ) to the parties entitled thereto. The vivor must file a Form STD-142 or, if the payments authority of the court to award distribution of due are greater than $5,000, must file with the personal property under this section shall not be Pennsylvania courts for Letters of Administration restricted because of the decedent's ownership of covering the deceased employe's property in the real estate regardless of its value. The decree of Commonwealth before he/she can receive pay- ments of wages, salary, and benefits. Page 2 of 5 f . The Internal Revenue Service (IRS) are included in the income of the survivor or the requires that payments made to a survivor or estate and must be reported on Form 1099-MISC, personal representative be reported on Form Statement for Recipients of Miscellaneous Income, 1099-MISC under either the Social Security Num- as non-employe compensation in the calendar year ber (SSN) of the survivor or a Taxpayer Identifica- received if $600 or more. If a debt has been tion Number (TIN) of a personal representative. If recovered from the payments made to a survivor payments are made using either a Small Estate or personal representative, the gross amount of Petition Decree of Distribution or a Short Certifi- the payment is reported on Form 1099-MISC. cate and the payments are made to the estate of the deceased, a TIN is required. If the payments ( 2 ) For local income tax purposes, pay- are made to a person, a SSN is required. IRS ments made to a survivor or the estate of a Publication 559 states "The first action you should deceased employe are not subject to the local take if you are the personal representative for the earned income taxes levied under the authority of decedent is to apply for an employer identification Act 511, Local Tax Enabling Act. number for the estate. You should apply for this number as soon as possible because you need it ( 3 ) For unemployment compensation tax on returns, statements, and other documents that purposes, payments made to a survivor or the you file concerning the estate. You must also give estate of a deceased employe are not subject to the number to payers of interest and dividends and the unemployment compensation tax. other payers who must file a return concerning the estate." ( 4 ) For social security and medicare tax purposes, salary and wage payments which are The survivor or personal representative can apply made by an employer to a survivor or to the estate for a TIN either by completing IRS Form SS-4 and of a deceased employe after the calendar year submitting it though the mail or by telephoning the in which the employe dies are not wages and IRS and applying for one over the phone. Failure should not be reported. Amounts earned by an to supply the necessary SSN or TIN will result in employe and paid in the calendar year of his backup withholding of federal tax at the current or her death are wages (to the deceased) and rate of 31 percent. must be reported even though paid to a survivor or personal representative. g . Payments made to survivors and personal representatives (estates) are to be treated for h . Management Directive 505.7, Personnel income and social security tax purposes as Rules, §§30.14(b), 30.25(b), and 30.33(b), states follows: that: "In the event of the death of an employe, any anticipated annual, sick, or personal leave shall (1) For federal and state income tax be treated as earned approved leave." purposes, an employe's tax year ends on the date of his or her death. Only salary or wage payments i . Form STD-142, Affidavit to Procure • actually or constructively received up to the date of Salary, Wages, or Employe Benefits Due a • death are income to the deceased and subject to Deceased Employe, cannot be used if the • normal income tax withholding. These payments employe was not a resident of Pennsylvania and • and any withheld taxes are to be reported on the the survivor is a non-resident of Pennsylvania. In • deceased employe's Wage and Tax Statement, IRS any situation, Form STD-142 cannot be used if the • Form W-2, for the calendar year of the death. total entitlement exceeds $5,000. • Payments made to a survivor or personal representative that represent unpaid compensation for services rendered by the dece- dent are not wages subject to federal or state income tax withholding. However, such amounts Page 3 of 5 5. PROCEDURES. Action By Step Action Action By Step Action Agency 1. Processes an Employe Trans- Agency 5. Ensures that an SSN or TIN, Personnel action 002500, death, for the Personnel as appropriate, and a com- Office. deceased employe utilizing Office. plete address is provided on the appropriate Special the Short Certificate or Small Factor Code from Table Estate Petition Decree of 796. This step is performed Distribution. Forwards the only if the employe's pay forms to the Payroll Office. status was not '07' at the time of death. Payroll Office. 6. Establishes a Survivor Record on the Personnel/Payroll • 2. Estimates the total gross of all System for each survivor or • payroll entitlements. If the personal representative to • gross to be paid is $5,000 or whom payment is to be made • less, provides Form STD-142 and/or for each Survivor to survivor and informs survi- Authorization Document. vor that he/she should supply a SSN. Informs the survivor 7. Sends an EMS message to that this information will be Bureau of Management used for federal tax forms. Information Systems, Payroll Systems Section, notifying 3. Ensures that a SSN and a them of a survivor payment complete address is pro- to be processed. The vided on Form STD-142. For- message should include the wards the completed form to following: the Payroll Office. Deceased Employe's Name 4. If the gross to be paid will Employe Number exceed $5,000, informs the Position Number survivor of the need for a Date of Death • Short Certificate or if gross is • $25,000 or less, a Small Note: The Retirement Com- Estate Petition Decree of pletion Code must be proc- Distribution. essed prior to sending the EMS message to BMIS. a . Informs the survivor that he/she should supply a 8. Establishes the appropriate BMIS Payroll SSN or TIN, as appro- Tax Status Codes on the Systems priate, and that this infor- Personnel/Payroll System. Section. mation will be used for Notifies the Payroll Office via federal tax forms. EMS when codes are estab- lished so payments can be b . Supplies survivor with processed. The tax status IRS Form SS-4, to be codes suppress the withhold- used to apply for a TIN. ing of taxes when the pay- Informs the survivor that ment is issued. the TIN can be requested by telephone from the 9. Determines the pay date of Payroll Office. IRS. any undistributed or uncashed checks issued in the deceased employe's name. Page 4 of 5 Action By Step Action Action By Step Action Payroll Office. a. If the check is dated on Payroll Office. survivor or personal repre- or before the employe's sentative. Coordinates pay- date of death, deposits ment with input processing for the check to the advance- inclusion in the $5,000 ment account. Issues a threshhold, if appropriate. replacement check in the name of the survivor 1 2 . Processes Survivor Adjust- from the advancement ment transaction using the account. Do not process appropriate Taxpayer Identi- a payroll refund for the fication Number and Survivor check. The amount of Authorization Document Code these checks is included to record on the survivor in the $5,000 threshold record the amount of the pay- for Form STD-142 and ments made to the survivor. the $25,000 threshold for These amounts must be the Small Estate Petition recorded in the correct Decree of Distribution. quarter and calendar year as the payments. This is done b . If the check is dated after to record the amount to be the employe's date of reported on Form 1099-MISC. death, processes a refund (gross thru net) in the 13. Processes an Employe Trans- normal manner. action Code 056000 using appropriate Taxpayer Identifi- 10. Processes a Regular Earnings cation Number and Survivor Supplemental transaction for Authorization Document Code payment of any wages, to record on the survivor salary, or employe benefits record the amounts of the due the deceased employe, checks reissued to the survi- but paid after the date of vor or personal representative death. under Step 9.a. These pay- ments are not reported on a . The supplemental trans- Form 1099-MISC. action will produce a pay- ment payable to the BMIS Payroll 14. At calendar year-end pro- deceased employe. The Systems duces, as appropriate, the deceased employe's Section. deceased employe's W-2, the records will be updated. Employe Information Letter, and Form 1099-MISC. b . Pulls the supplemental payment and deposits the Payroll Office. 1 5 . Distributes the calendar year check into the advance- end documents to the appro- ment account. From the priate survivor and/or person- advancement account, al representative. Data that reissues the check pay- has been included on these able to the survivor or forms can be viewed on-line personal representative. in the ICS Personnel/Payroll System on the PET044 1 1 . Prepares and processes a and PBP031 displays. General Invoice, Form STD-152, for the payment of travel expenses to the This directive supersedes Management Directive 315.13 dated September 15, 1995. Page 5 of 5