Short Answer

In North Carolina, a state income tax refund of $200 or less from a joint return belongs entirely to the surviving spouse. If the refund is more than $200, the spouse gets $200 plus one-half of the excess and the estate gets the rest. If a check is payable to both you and the deceased, endorse it as personal representative for the decedent and as yourself, then deposit each share to the proper account and record the estate’s portion in the final accounting.

Understanding the Problem

You are the surviving spouse and personal representative in North Carolina. You received (or expect) a North Carolina state income tax refund check after filing a joint return, and the check may list both you and the deceased. You want to know whether to put the money in the estate account or your personal account as you prepare to close the estate.

Apply the Law

North Carolina law assigns small state income tax refunds from joint returns entirely to the surviving spouse. For larger refunds, the law splits the amount between the spouse and the estate by a set formula. The Clerk of Superior Court (Estates Division) oversees your accounting. Before closing, you must deposit the estate’s share into the estate account and apply it to claims if needed.

Key Requirements

• Identify the refund type and amount: Confirm it is a North Carolina state income tax refund and note the dollar amount.
• Apply the $200 threshold: $200 or less goes entirely to the surviving spouse; above $200 is split.
• Calculate the split if over $200: Spouse gets $200 plus one-half of the excess; the remainder belongs to the estate.
• Handle the check correctly: Endorse as personal representative for the decedent and endorse personally; deposit each party’s share into the correct account (estate vs. personal).
• Account and pay claims: Report the estate’s share on the estate’s accounting and, if the estate has unpaid claims, use the estate’s share according to claim priority before distributions.

What the Statutes Say

• North Carolina Gen. Stat. § 28A-15-8 (State tax refunds to surviving spouse) – State income tax refunds of $200 or less belong solely to the surviving spouse.
• North Carolina Gen. Stat. § 28A-15-9 (Division of larger refunds) – For refunds over the threshold, spouse receives the threshold amount plus one-half of the excess; the rest is the estate’s.
• North Carolina Gen. Stat. § 28A-19-6 (Order of claims) – The estate’s share must be used to pay valid claims in statutory priority before distributions.

Analysis

Apply the Rule to the Facts: Because this is a North Carolina state refund after a joint return, first check the amount. If it is $200 or less, deposit it into your personal account because the statute awards it to the surviving spouse. If it exceeds $200, deposit the spouse’s portion (the first $200 plus half of the excess) into your personal account and the balance into the estate account, then show the estate’s portion on the final accounting and apply it to any remaining claims before closing.

Process & Timing

1. Who files: Personal representative. Where: Clerk of Superior Court (Estates Division) in the county of the decedent’s domicile. What: Endorse the check “as Personal Representative of [Decedent]” and endorse personally; if needed, ask the North Carolina Department of Revenue to reissue separate checks. When: Complete deposits and show the estate’s share on the final account before submitting it for approval (typically within one year of qualification unless extended).
2. Record the deposit on the estate’s interim/final accounting and apply the estate’s share to valid claims in statutory order if the estate is short on funds; county review timelines can vary.
3. Submit your final account; upon approval, the Clerk issues an order closing the estate, after which any unused estate share attributable to the refund remains accounted for per the approved distributions.

Exceptions & Pitfalls

• If the refund is $200 or less, do not deposit it into the estate account; it belongs solely to the surviving spouse.
• Confirm it is a North Carolina state refund; federal refunds have different thresholds and rules.
• Endorse properly: sign as personal representative for the decedent and sign personally for the spouse. Keep copies for your accounting file.
• Do not commingle: deposit the spouse’s share to a personal account and the estate’s share to the estate account.
• If the estate has unpaid claims, apply the estate’s share according to the statutory priority before making any distributions.

Talk to a Probate Attorney

If you’re dealing with a North Carolina state tax refund check made out to you and a deceased spouse while closing an estate, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at (919) 341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.