Preparing a deceased person's return

Preparing a return for a deceased taxpayer can be complex. You should get the CRA guide T4011, Preparing Returns for Deceased Persons before proceeding. You can find most CRA forms and publications on the CRA's Forms and Publications web page.

What returns do I have to file?

You may have to file the following returns for the year of death:

Final return (mandatory)
Some amounts that an employer pays (for example, boxes 18 and 28 of the T4A slip) are income for the estate. If the estate earned income like this, or interest income, after the date of death, you need to file a T3 Trust Income Tax and Information Return.
You have to file any returns for previous years that the deceased person did not file.
You can choose to file up to three optional returns for the year of death. You do not have to file any of the optional returns. However, by filing one or more of the returns, you may reduce or eliminate tax that you would otherwise have to pay for the deceased.

Although you can prepare the final return using TurboTax, you cannot use it to prepare the additional returns outlined above. We recommend you get assistance if any of these situations apply.

Clearance certificate: As the legal representative, you may want to get a clearance certificate before you distribute any property under your control. A clearance certificate certifies that all amounts for which the deceased is liable to the CRA have been paid, or that the CRA has accepted security for the payment. If you do not get a certificate, you can be liable for any amount the deceased owes. A certificate covers all tax years to the date of death. It is not a clearance for any amounts a trust owes. If there is a trust, a separate clearance certificate is needed for the trust.

Who has to file the return for a deceased person?

The legal representative has to file the deceased person's final income tax and benefit return. If you are an executor, an administrator, or a liquidator, you are the legal representative of a deceased person.

Note: As the legal representative, you may wish to appoint an authorized representative to deal with the CRA for tax matters on your behalf. You may do so by completing Form T1013, Authorizing or Cancelling a Representative.

Things you should know

If the taxpayer had interest income that was shared with another taxpayer (for example, a spouse), the deceased's portion must be prorated. TurboTax does not do this automatically.
If the deceased was receiving GST/HST credit payments, and received a payment after the date of death, you must return the payment to the CRA.
Vacation pay is income of the deceased person. Payment for unused sick leave is often income of the estate or beneficiary that receives it. In some cases, sick leave payments can be a death benefit. For details, see Interpretation Bulletin IT-508, Death Benefits.
Do not report a CPP or QPP death benefit on the deceased's return. It should be reported either on the return of the recipient or on a T3 Trust Income Tax and Information Return for the estate.