Do returns need to be filed for all trusts?

You must file Form IL-1041, Fiduciary Income and Replacement Tax Return, if you are a fiduciary of a trust or an estate, and the trust or estate:

  • has net income or loss as defined under the Illinois Income Tax Act (IITA) allocable to Illinois, regardless of any deduction for distributions to beneficiaries;
  • is a resident of Illinois and files, or is required to file, a federal income tax return regardless of net income or loss; or
  • is a nonresident of Illinois but received income from Illinois sources which was not reported as pass-through withholding on Form IL-1120-ST, Form IL-1065, or Form IL-1041.

Note: "Grantor" trusts are not required to file Form IL-1041; however, they should file Form IL-1040.

If the trust or estate is a charitable organization exempt from federal income tax due to Internal Revenue Code (IRC), Section 501(a), it is not required to file Form IL-1041. However, unrelated business taxable income, as determined under IRC, Section 512 is subject to tax, without any deduction for the Illinois Income Tax, and must be reported on Form IL-990-T, Exempt Organization Income and Replacement Tax Return, instead of Form IL-1041. For more information, see Form IL-990-T Instructions.

You are required to report and pay pass-through withholding on behalf of your nonresident beneficiaries if they have not provided Form IL-1000-E, Certificate of Exemption for Pass-through Withholding, to you. Individuals cannot claim the exemption from pass-through withholding by filing Form IL-1000-E. For tax years ending:

  • On or after December 31, 2014, you must include these amounts on your Form IL-1041 and Schedule D, Beneficiary Information. You must also complete and retain a copy of Schedule K-1-T(3), Pass-through Withholding Calculation for Nonresident Members, for each of your nonresident beneficiaries.
    Note: If you are a fiscal-year filer and file during a year with a tax rate change, you will be required to complete Schedule K-1-T(3)-FY, Pass-through Withholding Calculation for Nonresident Members (for Fiscal Filers), instead. See the Schedule K-1-T(1) Instructions for more information.
  • Before December 31, 2014, you must file Form IL-1000, Pass-through Entity Payment Income Tax Return.
    Note: Prior year forms and instructions can be found by clicking the "Prior Years" link on our Business Tax Forms page and selecting the corresponding year.

See Form IL-1041 Instructions for due dates and filing requirements.

If you have additional inquiries, you may submit them to the Questions, Comments, or Request form.