As trustee for supplemental needs trust fund, fund received Form 1099-INT for $262 interest from CD bought w/trust funds. Does trust fund need to file income tax? Form? .

[eaglephant]

$262 interest is only income for 2018. Supplemental needs trust fund established several years ago for my sister who receives SSDI as her sole source of income.

[tagteam · Accepted solution]

"Does trust fund need to file income tax? Form? ."

If the trust was established with your sister's own assets, then chances are that the trust is a grantor trust and, as a disregarded entity, the interest income can be reported on her income tax return.

If the trust has its own taxpayer ID number (EIN), or is otherwise a nongrantor trust, then the trust will file an income tax return on Form 1041 because it has taxable income for the year (defined as gross income less deductions).

See https://www.irs.gov/instructions/i1041#idm140630132225648

[Dtabor]

Hi,

I established a Special Needs Trust for my daughter, transferring $99 to the bank account designated for the trust. There have been no further deposits into the account. Do we need to file a tax return for her trust?

[RobertB4444]

@Dtabor  No.  A trust has to earn at least $600 in order to have to file a tax return.  At this point the trust has earned zero dollars.

[tagteam]

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@RobertB4444 wrote:

@Dtabor  No.  A trust has to earn at least $600 in order to have to file a tax return. 

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That is the threshold for estates. For trusts the filing threshold is any taxable income for the tax year or gross income of $600 or more (regardless of taxable income).

See https://www.irs.gov/instructions/i1041#en_US_2021_publink1000285943