Fiduciary Income Tax FAQs

Every estate or trust that is required to file Form IT-41 must have a federal identification number (employer identification number [EIN]) issued by the IRS. Federal and Indiana tax returns require an EIN.

An EIN will be issued immediately if you apply online at www.irs.gov.

The IRS also allows you to apply by telephone toll-free at 800-829-4933 from 7 a.m.–10 p.m. in the fiduciary’s local time zone, by fax, or mail.

Modernized e-file (MeF) is now available for filing and amending fiduciary income tax returns. Forms IT-41 and IT-41ES can still be filed using paper returns. Fillable forms are available at dor.in.gov/tax-forms/fiduciary-income-tax-forms/.

Yes, there are different requirements for specific entities as noted in the guidelines below.

Bankruptcy Estate
A bankruptcy estate of an individual will file Form IT-41 with an enclosed copy of the individual’s IT-40 Indiana Individual Income Tax Return. The fiduciary return will report only the amount of tax computed on the individual income tax return. If there is tax due, report the tax on line 11 of the IT-41. The payment should be submitted with the IT-41 return.

Charitable Trusts
Charitable trusts filing federal Form 5227 Split-Interest Trust Information Return should file Form IT-41 with an enclosed copy of Form 5227. Form IT-41 will be an informational return.

Common Trust Fund
Common trust funds file Form IT-65, Indiana Partnership Return (not the Form IT-41). For additional information, contact corporate income tax at 317-232-0129.

Electing Small Business Trust (ESBT)  
Special rules apply when figuring the tax on the S portion of an ESBT. The S portion of an ESBT is the portion of the trust that consists of stock in one or more S corporations and is not treated as a grantor type trust. Following the federal guidelines, the tax on the S portion must be figured separately from the tax on the remainder of the ESBT (if any) and enclosed with the return. Report the tax due on the Indiana portion of income from an ESBT on line 11 of the IT-41 return. You must enclose a separate statement showing the income and tax computation using the Indiana state tax rate.

Estates
An estate of a deceased person is a taxable entity separate from the decedent. It generally continues to exist until the final distribution of the estate assets is made to heirs and other beneficiaries. The income earned from the property of the estate during the period of administration or settlement must be accounted for and reported by the estate.

According to Indiana Code 6-3-4-1 and for taxable years beginning after Dec. 31, 2012, every resident estate having gross income or nonresident estate having any gross income from sources within the state of Indiana exceeding the amount provided in Section 6012(a)(3) of the Internal Revenue Code (currently $600) for the taxable year must file a return.

For purposes of filing the Indiana Fiduciary Income Tax Return, estates are classified as either resident or nonresident. For estates, residence is based on the decedent’s residence at the time of death.

Resident estates are taxable on all federal taxable income from all sources, regardless of where it is earned.

Nonresident estates are taxable in Indiana on all federal taxable income derived from Indiana sources. Income derived from sources within and outside of Indiana shall be determined under Indiana Code 6-3-2-2 (see Nonresidents). Nonresident estates may adjust federal taxable income (or loss) reported on line 1 to reflect taxable income allocable to Indiana.

Grantor Trusts
In the case of a grantor trust, the income is taxed at the individual level. Therefore, if Form IT-41 is filed, it is only considered an informational return identifying the trust and the grantor. Enclose a statement (or a copy of the federal return) that discloses income and deductions attributable to the grantor. No financial information should be entered on the IT-41.

Private Foundations
Every private foundation with income from sources within the state of Indiana that is taxed as a trust filing federal Form 990PF must file using Form IT-41. Enclose a copy of the federal Form 990PF with the Form IT-41 when filing. NOTE: The due date for filing the Form IT-41 is the 15th day of the fifth month following the taxable year’s close.

Retirement Plans
Every retirement plan with income from sources within the state of Indiana that is taxed as a trust filing federal Form 990T must file using Form IT-41. Enclose a copy of the federal Form 990T with the Form IT-41 when filing. NOTE: The due date for filing the Form IT-41 is the 15th day of the fifth month following the taxable year’s close.

Trusts
According to Indiana Code 6-3-4-1, for taxable years beginning after Dec. 31, 2012, every resident trust having gross income or nonresident trust having any gross income from sources within the state of Indiana exceeding the amount provided in Section 6012(a)-(4) of the Internal Revenue Code (currently $600) for the taxable year must file a return.

For purposes of filing the Indiana Fiduciary Income Tax Return, trusts are classified as either resident or nonresident. For Indiana, the trust residence is determined by the place where it is administered. Therefore, you must determine where the trustee or personal representative is located and where the records are kept for the trust. Resident trusts are taxable on all federal taxable income from all sources regardless of where it is earned.

Nonresident trusts are taxable in Indiana on all federal taxable income derived from Indiana sources. Income derived from sources within and outside of Indiana shall be determined under Indiana Code 6-3-2-2 (see Nonresidents). Nonresident trusts may adjust federal taxable income (or loss) reported on line 1 to reflect taxable income allocable to Indiana.

A trust may qualify as a simple trust if:

• The trust instrument requires that all income must be distributed currently.
• The trust instrument does not provide that any amounts are to be paid, permanently set aside or used for charitable purposes.
• The trust does not distribute amounts allocated to the corpus of the trust.

A complex trust is any trust that does not qualify as a simple trust. These determinations are made by the IRS.

Estimated payments are accepted at the fiduciary level but are not required. Estimated payments may be made through INTIME or by using the EIN and the Form IT-41ES Fiduciary Payment Voucher.

There are no carryover provisions for estimated payments. Therefore, overpayments are not applied to the estimated account for the following year. Any overpayments will be refunded. Do not request to transfer estimated payments between individual and fiduciary accounts.

For purposes of filing the Indiana Fiduciary Income Tax Return, estates and trusts are classified as either resident or nonresident. For Indiana:

• the estate is a resident if the decedent was an Indiana resident at the time of death; and,
• the trust residence is determined by the place where it is administered. Therefore, you must determine where the trustee or personal representative is located and where the records are kept for the trust or estate.

Resident estates or trusts are taxable on all income from all sources regardless of where it is earned. Therefore, resident fiduciaries must report all attained income.

Nonresident estates and trusts are taxable in Indiana on all income derived from Indiana sources. Nonresident estates and trusts must adjust federal taxable income (or loss) to reflect taxable income allocable to Indiana.

Income received from Indiana sources is considered Indiana income to nonresidents, except certain types of Indiana source income that are subject to tax only by the taxpayer’s legal state of residence. Interest, dividends, royalties and gains from the sale of capital assets are subject to tax only by the taxpayer’s state of legal residence unless such income results from the conduct of a trade or business in Indiana. If a trade or business is conducted in Indiana, the income should be reported as Indiana income.

Income from a qualified pension, annuity or profit-sharing plan is subject to tax by the taxpayer’s legal state of residence. Lump sum distributions from qualified plans are subject to tax by the state that, at the time of distribution, is the taxpayer’s legal state of residence. Deferred compensation other than from a qualified retirement plan, accumulated vacation, bonus, severance, sick pay and income from a stock option plan are directly attributable to services performed and are taxable by the state where the services were performed.

Form IT-41 must be filed by the 15th day of the fourth month following the taxable year’s close.

For retirement plans filing federal Form 990-T and for private foundations filing federal Form 990-PF, the return must be filed by the 15th day of the fifth month following the close of the taxable year.

The fiduciary may request an extension of time to file, if needed. If no tax liability is anticipated, DOR accepts the federal extension of time application (Form 7004, Application for Automatic Extension Time to File Certain Business Income Tax, Information, and Other Returns). You do not need to contact DOR prior to filing the annual Form IT-41 fiduciary return. A copy of the federal extension of time must be enclosed with the return when it is filed. DOR’s time allowance aligns with the IRS, plus 30 days.

If a fiduciary does not need a federal extension of time but needs one to file the state return, the extension can be requested in two ways:

• Via DOR’s e-services portal, INTIME, at intime.dor.in.gov.
  • When filing an extension request via INTIME, an extension payment can be made at the same time.
• By submitting a letter to DOR prior to the due date of the annual return.

The request should be mailed to:

Indiana Department of Revenue
Fiduciary Section
P.O. Box 6079
Indianapolis, IN 46206-6079

If you anticipate owing tax on the return, the extension is for time to file only, not time to pay. To obtain an extension, the fiduciary must enclose with Form IT-41 a copy of the approved request for extension of filing the federal fiduciary return and pay at least 90% of the estimated Indiana tax liability. The extension payment must be sent by the return’s original due date with Form IT-41ES, which is available online at dor.in.gov/tax-forms. If tax liability is not anticipated, enclose a copy of the approved federal extension request with the Form IT-41 return when filing.

Yes, payments can be made using DOR’s e-services portal, INTIME, at intime.dor.in.gov. If mailing your payment, make your check or money order payable to the Indiana Department of Revenue and submit it with your paper return.

Interest rates are listed in Departmental Notice 3.

No, overpayments will be refunded in the name of the estate or trust.

Returns with Payment
Indiana Department of Revenue
Fiduciary Section
P.O. Box 6192
Indianapolis, IN 46206-6192

All Other Returns or Correspondence
Indiana Department of Revenue
Fiduciary Section
P.O. Box 6079
Indianapolis, IN 46206-6079

Street Address
Indiana Department of Revenue
Fiduciary Section
100 North Senate Avenue
Indianapolis, IN 46204-2253