How is a grantor trust taxed in the state of Pennsylvania?
Pennsylvania law imposes the income tax on grantor trusts according to the same Pennsylvania personal income tax rules that apply to irrevocable trusts unless the grantor trust is a wholly revocable trust. Grantor trusts other than settlor-revocable trusts are required to file the PA-41 Fiduciary Income Tax Return.
Is a trust considered a nonresident estate in PA?
The residences of the fiduciary and the beneficiaries of the estate are immaterial. Pennsylvania tax law defines a nonresident estate as any decedent’s estate that is not a resident estate of Pennsylvania. A trust is a separate taxpayer if, under the governing instrument and applicable State law, it is irrevocable.
How is a trust determined to be a resident Trust?
The single controlling factor in determining if a trust is a resident trust for Pennsylvania purposes is whether the decedent, the person creating the trust, or the person transferring the property to the trust was a Pennsylvania resident. The residences of the fiduciary and the beneficiaries of the trust are immaterial.
Is a charitable remainder annuity trust a charitable trust in Pennsylvania?
Federally qualified charitable remainder annuity trusts (CRAT) and charitable remainder unitrusts (CRUT) are not Pennsylvania charitable trusts if, during the current taxable year: Any part of the trust’s retained earnings may benefit any private individual in subsequent years; or
What are the rules for irrevocable trusts in Pennsylvania?
Pennsylvania requires the Trustee of an irrevocable trust to send a notice to any beneficiary or potential beneficiary over the age of 25 since courts in Pennsylvania do not enforce a trust except when a Trustee or beneficiary makes a request.
Does a trust have to file a pa-41?
For Pennsylvania personal income tax purposes, the trust is required to file a PA-41 Fiduciary Income Tax Return and distribute the income to the income beneficiary. The income shall be reported to the income beneficiary as trust income.