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Allocation of withheld tax on final trust return

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Level 1
last updated ‎July 06, 2020 8:39 PM

The trust has federal and state tax withheld on an annuity.  Income is being distributed to the beneficiaries and there is excess withholding that also needs to be distributed.  The 1041-T provides for distributing excess estimates but there is no provision for distributing withheld tax.  Do I use this form and include a statement to the effect that this is not for estimates but for withheld taxes instead?

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Level 15
Level 15
last updated ‎July 06, 2020 8:39 PM

I believe regular withholding would need to be remitted to the tax agencies under the beneficiaries SSNs for them to get credit on their own returns....you cant do it with just the 1041 and the K-1s like you can with backup withholding or estimated payments..

I found this in a quick google search

https://www.taxcpe.com/blogs/news/1041-allocation-of-estimated-payments-withholding#:~:text=Withhold...


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Level 10
last updated ‎July 06, 2020 8:39 PM

You can't do that. Get the refund and pay the tax on the 1040s. IRS will hold up that money forever.

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