Form 1041-T, Allocation of Estimated Tax Payments to Beneficiaries is primarily used by a trust to elect under section 643(g) to have any part of its estimated tax payments treated as if it were made by a beneficiary or beneficiaries. The fiduciary files Form 1041-T to make this election, and once made the election is irrevocable. This election can also be made by a decedent’s estate but only in its final year.
Form 1041-T must be filed by the 65th day following the tax year in which the return was due. Form 1041-T can be included with the estate's or trust's income tax return, but doing so doesn't change its filing due date. Thus, if you're filing Form 1041-T with Form 1041, both must be filed by the 65th day following the tax year in which the return was due in order for the allocation of estimated payments to be considered timely to the beneficiaries.
Form 1041-T can be electronically filed with Form 1041 or mailed to the IRS. See the Form 1041-T instructions for the mailing address.
To report on Form 1041 that a 1041-T is being filed with the tax return or has been filed separately, from the Main Menu of the tax return (Form 1041) select:
- Heading Information
- Other Information
- Form 1041-T filed - Enter the date the 1041-T was filed. This is the date that will print on the beneficiary Schedule K-1 Item D.
To create a Form 1041-T that will be filed with the tax return, from the Main Menu of the tax return (Form 1041) select:
- Tax and Payments
- Total Payments
- Estimated Tax Payments Allocated to Beneficiaries
- Filing Form 1041-T for the final year of estate/trust - Indicate Yes or No as appropriate.
- Total amount of estimated tax to be allocated - Indicate how much of the estimated tax that has been paid is being allocated to the beneficiary(ies).
- Allocation to beneficiaries - If the beneficiary information has already been entered under the Schedule K-1 menu, click Pull then select each beneficiary to be included. Or, if the beneficiary info hasn't yet been entered in the Schedule K-1 menu you can select New and enter it.
- Proration Percentage - Enter the percent of the total estimated payments allocated to this beneficiary. Note that if estimated payments are being allocated to multiple beneficiaries, be sure the total of the proration percentages equals 100%, otherwise the program will attempt to balance the total amount being prorated.
To enter the estimated payments amount on a beneficiary's Schedule K-1, from the Main Menu of the tax return (Form 1041) select:
- Schedule K-1
- Schedule K-1 Input - Select the beneficiary.
- Allocable Share Items
- Credits and Credit recapture
- Credit for estimated taxes - Enter the beneficiary's prorated share as shown on Form 1041-T.
Reminder: This form MUST be filed 65 days after the tax year in which the return was due. Sending 1041-T with the tax return does not negate this requirement. This election is irrevocable.
Note: This is a guide on entering a Form 1041-T into the TaxSlayer Pro program. This is not intended as tax advice.
IRS: Instructions for Form 1041, U.S Income Tax Return for Estates and Trusts
IRS: Instructions for Form 1041-T, Allocation of Estimated Tax Payments to Beneficiaries