May we elect Qualified Disability Trust versus Complex Trust classification for a Special Needs Trust?

[Greenthumbs62]

Is there any reason I should NOT elect the IRS classification: Qualified Disability Trust instead of the Complex trust? Taking the Qualified Disabled Trust election offers a $4,400 exemption versus a $100 exemption for the complex trust election.

I'm filing a 2022 trust return for a Special Needs Trust (a.k.a Supplemental Needs Trust).

    My parents set up this trust for my disabled sister before their death.

    The trust beneficiary is not yet 65 years old.

It is a shame TurboTax's General data entry in the Step by Step only offers 3 trust classification groups instead of the complete list of options. One could easily miss the nearly hidden option to clarify the trust type at the end of the return or on the actual 1041 forms.

Thank you for your feedback.

[Anonymous_ · Accepted solution]

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@Greenthumbs62 wrote:

Is there any reason I should NOT elect the IRS classification: Qualified Disability Trust instead of the Complex trust?

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There is most likely no reason not to do so provided the trust is properly classified as a QDT.

See https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=26-USC-99...

See also https://www.law.cornell.edu/uscode/text/42/1396p and

https://www.law.cornell.edu/uscode/text/42/1382c#a_3