Spouse passed away in December 2018 (filed a MFJ 2018 tax return). A 1099-R was received in the deceased spouses name in 2019. How do we report the 1099-R income. The 1099-R income was received in Jan 2019 for December 2018.
The surviving spouse cashed the check, so you would include the 1099-R on the surviving spouses tax return even though it has the deceased spouse's social security number? Would you paper file the tax return because there is federal & state tax withheld on this 1099-R?
Yes, to including the income. The tax is on the income, not on the piece of paper.
Claiming credit for the withholding: If it's $25 I probably would, to save IRS the expense of processing a lot more paperwork. If it's $2,500 I would tell the spouse to go back to the company, ask it to issue a 1099-MISC and zero out the 1099-R, and refund the withholding. People shouldn't cash other people's checks just because they're dead and then expect other people to help them out of a tax situation.