Thank you @BWWilliamsAssociates! After I put myself as the first taxpayer and my late husband as second taxpayer, IRS accepted the e-file. It was a bit of a pain to go through the program again and change the names on W2s, 1099s and such. And I double and triple checked everything to make sure everything is correct. But in the end it's worth it. Our state won't allow e-file if one of the spouse is deceased. So I'll have to mail that in.
When the programs detects a deceased taxpayer, it should have a message about the surviving spouse should be listed as first taxpayer in order to efile successfully. Either they don't want to fix it, or they don't know about it.
