Can a Survivors Trust receive federal and state income tax refund?

[dale-courtright]

A Family Survivors (complex) Trust receives monthly annuity payments from an insurance company and that company withholds federal and state income tax. The exact amounts withheld show up on my Trust 1041 federal and 141 state as refunds. Does the Trust receive the refunds or should they flow through to the beneficiary with all the other Trust income?

[tagteam · Accepted solution]

" Does the Trust receive the refunds or should they flow through to the beneficiary with all the other Trust income?"

Except for backup withholding, withheld income tax cannot be passed through to beneficiaries.

See https://www.irs.gov/instructions/i1041#idm140630131254624

[dale-courtright]

So I should file the Fed and State returns and expect refunds from both? This is a Family Survivors (complex) Trust

[tagteam]

I am not sure about your state, but you will get a refund (in the name of the trust) from the feds.

[dale-courtright]

Thank you!

[tagteam]

You are most welcome.