Pennsylvania PA Fiduciary Income Tax Return

PA Fiduciary Income Tax Return
2023 PA Fiduciary Income Tax Return/PA Schedule OI - Other Information (Form and Instructions) (PA-41/PA-41 OI)
IMPORTANT: FILL IN FORM MUST BE DOWNLOADED ONTO YOUR COMPUTER PRIOR TO COMPLETING

PA-41

2304110055

PA Fiduciary Income Tax Return
PA-41 (EX) MOD 03-23 (FI)
PA Department of Revenue

START
HERE

2023

OFFICIAL USE ONLY

PLEASE PRINT IN BLACK INK. ENTER ONE LETTER OR NUMBER IN EACH BOX. FILL IN OVALS COMPLETELY.
Fiduciary’s Daytime Telephone Number
Federal Employer Identification Number Decedent’s Social Security Number

➜
PLEASE WRITE IN THE FEIN & SOCIAL SECURITY NUMBER ABOVE

Extension Requested
Amended PA-41

Name of Estate or Trust (See Online Detailed Instructions)

Name and Title of Fiduciary

Fiscal-Year Filer
FY beginning __/__/__

MM/DD/YY

__/__/__

MM/DD/YY

and ending

Residency Status. Fill in only one oval.
R Pennsylvania Resident
N Nonresident
If “N”, Name of State

Address of Fiduciary (Street Number and Name, etc.)

City or Post Office

State

ZIP Code

Final Return
MM/DD/YY
F Enter Ending Date: __/__/__

Country Code

Dollars
DOLLARS

F

Submit all required Pennsylvania supporting schedules.
If Line 3, 4 or 5 is a LOSS, fill in the oval next to the amount.

1. INTEREST INCOME and GAMBLING and LOTTERY WINNINGS. . . . . . . . . . . . . . . . . . . .

1.

2. DIVIDEND AND CAPITAL GAINS DISTRIBUTIONS INCOME. . . . . . . . . . . . . . . . . . . . . . .

2.

3. NET INCOME or LOSS from the Operation of a Business, Profession or Farm.
....................................................................

LOSS

4. NET GAIN or LOSS from the Sale, Exchange or Disposition of Property.
....................................................................

LOSS

5. NET INCOME or LOSS from Rents, Royalties, Patents or Copyrights.
....................................................................

LOSS

Cents
CENTS

3.
4.
5.

6. ESTATE or TRUST INCOME. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.

7. TOTAL INCOME. Add only the positive income amounts from Lines 1, 2, 3, 4, 5 and 6.
Do not add losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.

8. DEDUCTIONS from PA SCHEDULE DD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.

9. NET PA-TAXABLE INCOME. Subtract Line 8 from Line 7. . . . . . . . . . . . . . . . . . . . . . . . . . .

9.

10. PA TAX LIABILITY. Multiply Line 9 by the tax rate 3.07 percent (0.0307). . . . . . . . . . . . . . . . 10.
11. TAX WITHHELD FOR NONRESIDENT BENEFICIARIES. See the instructions. . . . . . . . . . 11.
12. TOTAL PA TAX LIABILITY. Add Lines 10 and 11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
13. 2023 ESTIMATED PAYMENTS and CREDITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
14. NONRESIDENT TAX WITHHELD from PA SCHEDULE(S) NRK-1. . . . . . . . . . . . . . . . . . . . 14.
15. TOTAL CREDIT for TAXES PAID by PA RESIDENT ESTATES or TRUSTS
to OTHER STATES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.
16. TOTAL OTHER CREDITS from PA SCHEDULE OC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.
17. PA INCOME TAX WITHHELD.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.

18. TOTAL PAYMENTS and CREDITS. Add Lines 13, 14, 15, 16 and 17. . . . . . . . . . . . . . . . . . 18.
19. USE TAX. See the instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.

FC

EC

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IMPORTANT: FILL IN FORM MUST BE DOWNLOADED ONTO YOUR COMPUTER PRIOR TO COMPLETING

PA-41

2304210053

PA Fiduciary Income Tax Return
PA-41 (EX) MOD 03-23 (FI)
PA Department of Revenue

START
Name as shown on PA-41
HERE

➜

2023
Federal EIN or Decedent’s Social Security Number

20. TAX DUE. If the total of Line 12 and Line 19 is more than Line 18, enter the
difference here. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.
21. PENALTIES AND INTEREST. See the instructions for additional
information. If including REV-1630F, fill in oval. . . . . . . . . . . . . . . . . .

21.

22. TOTAL PAYMENT – Add Lines 20 and 21. Make check or money order payable to
PA DEPT. OF REVENUE. See the instructions on HOW TO PAY.. . . . . . . . . . . . . . . . . . . . . 22.
23. OVERPAYMENT. If Line 18 is more than the total of Lines 12, 19 and 21, enter the
difference here. The total of Lines 24 and 25 must equal Line 23 . . . . . . . . . . . . . . . . . . . 23.
24. REFUND – Amount of Line 23 you want as a check mailed to the estate or trust.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . REFUND 24.
25. CREDIT – Amount of Line 23 you want as a credit to the 2024 estimated tax account
of the estate or trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.
Signature(s). Under penalties of perjury, I have examined this return, including all accompanying schedules and statements, and to the best of my belief, it is true, correct and complete.

Signature of Fiduciary

Date

Please remember to sign your PA-41 after printing.

Name of preparer or his or her company name, based on all information on this return of which the preparer has any knowledge.
Firm FEIN

Preparer’s Name and Telephone Number

PA SCHEDULE OI - Other Information

PA-41 OI 03-23 (FI)

MM/DD/YY

Preparer’s PTIN

2023
YES

NO

1. Is this a revocable trust?
2. Is this an irrevocable trust?
3. Does the estate/trust receive income from or pay income to a foreign entity? If “Yes,” include a statement
with this return. See the PA-41 Schedule OI instructions for what to include with that statement.
4. Has the federal government made an additional assessment on the income of this estate/trust in the last four
years? If “Yes,” include a statement with this return explaining such adjustments. See the PA-41 Schedule OI
instructions.
5. Did this estate/trust receive income from a partnership, S corporation, LLC, or another estate/trust? If “Yes,” list
below all such partnerships, S corporations, LLCs, estates/trusts, showing the FEIN, name and address of each.
If additional space is necessary, include a supplemental statement (in the same format) with this return.
FEIN
Name
Address
a.
b.
c.
d.
e.
f.
6.

If this return is for a trust, state the name and address of the grantor below.
Name of Grantor:

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2023
Instructions for Form PA-41
PA-41 IN (EX) MOD 03-23

GENERAL INFORMATION
PURPOSE OF FORM
The fiduciary of a resident estate or trust uses the PA-41,
Fiduciary Income Tax Return, to report:

Pennsylvania Fiduciary Income Tax Return

• The fiduciary of an irrevocable electing small business
trust received or realized more than $33 of
Pennsylvania-taxable income or records a loss in any
class of income;

• The income, deductions, gains, losses, etc., of the
estate or trust;

• An estate or trust earned, received or realized more
than $33 of Pennsylvania-taxable income or records a
loss in any class of income;

• The income that is either accumulated or held for future
distribution or distributed currently to the beneficiaries;
and

• The estate is a taxable bankruptcy estate of a Chapter
7 or 11 bankruptcy debtor created under Section 1398
of the Internal Revenue Code of 1986;

• Any income tax liability of the estate or trust.
The fiduciary of a nonresident estate or trust uses the PA41 Fiduciary Income Tax Return to report:
• Pennsylvania-source income when there are no
resident beneficiaries;
• Worldwide income when the estate or trust has
Pennsylvania-source income and resident beneficiaries;
or
• Any income tax liability of the estate or trust.
TAX CREDITS
Estates and trusts cannot pass through any tax credits to its
beneficiaries.

PRIVACY NOTIFICATION
By law (42 U.S.C. §405(c)(2)(C)(i); 61 Pa. Code §117.16),
the department has the authority to use the Social
Security number (SSN) to administer the Pennsylvania
personal income tax and other Commonwealth of
Pennsylvania tax laws.
The department uses the SSN to identify individual taxpayers
and verify their incomes. The department also uses the SSN
to administer a number of tax-offset and child-support
programs that federal and Pennsylvania laws require.
The commonwealth may also use the SSN in exchange-oftax information agreements with governmental authorities.
Except for official purposes, Pennsylvania law prohibits the
commonwealth from disclosing information that individuals
provide on income tax returns, including the SSN(s).

WHO MUST FILE
An estate or trust must file the PA-41, Fiduciary Income Tax
Return, if any of the following apply:
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• The fiduciary of a resident estate or taxable trust
received taxable income/loss during its taxable year;
• The fiduciary of a nonresident estate or trust received
taxable income and the estate or trust has a
Pennsylvania resident beneficiary;
• The fiduciary of a grantor trust including a Grantor
Retained Annuity Trust (GRAT) or Grantor Retained
Unitrust (GRUT) received taxable income during its
taxable year regardless of whether it is required to file a
federal income tax return or not, unless the grantor trust
is a settlor-revocable trust;
• The fiduciary of a charitable trust including a Charitable
Remainder Annuity Trust (CRAT) and Charitable
Remainder Unitrust (CRUT) received taxable income
during its taxable year, regardless of whether it is
required to file a federal income tax return or not, when
any private individual benefits from the earnings of the
trust;
• The fiduciary of a nonresident estate or taxable trust
received Pennsylvania-source income/loss during its
taxable year;
• The fiduciary of a nonresident taxable trust including
grantor trusts, GRATs, GRUTs, CRATs and CRUTs
received Pennsylvania-source income/loss;
• The fiduciary of a revocable trust that becomes an
irrevocable trust (settlor of a revocable trust dies or the
terms of trust are altered to make the trust irrevocable)
received taxable income; or
• The fiduciary of a qualified sub-chapter S trust (QSST)
received income from an S corporation that must flow
through to resident or nonresident income beneficiaries.
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WHO DOES NOT FILE A PA-41 FIDUCIARY
INCOME TAX RETURN

• What part, if any, of the undistributed net income of a
trust (for administrative purposes) is required to be
added to corpus;

An estate or trust does not file the PA-41, Fiduciary Income
Tax Return, if it is one of the following:

• Whether property distributed in kind is distributed as a
gift or bequest of specific property;

• A charitable trust exclusively for religious, charitable,
scientific, literary or educational purposes;

• Whether an amount is properly paid out of corpus as a
gift or bequest of a specific amount of money;

• A revocable trust-any revocable trust (grantor or settlorrevocable);
• A nonresident estate or trust with no Pennsylvaniasource income/loss AND no Pennsylvania resident
beneficiaries;
• A funeral trust;
• A resulting or constructive trust created by operation
of law;
• A trust created exclusively for the benefit of creditors
except a taxable bankruptcy estate of a Chapter 7 or 11
bankruptcy debtor created under Section 1398 of the
Internal Revenue Code of 1986;
• A principal and agent relationship;
• A business trust or real estate investment trust;
• A trust created exclusively for the benefit of
employees, their families, or appointees under an
employee-benefit plan;
• A pension trust or profit-sharing trust;
• A trust that is a common trust fund for federal income
tax purposes; or
• A trust created by an entity or enterprise other than a
Pennsylvania personal income tax taxpayer:
◦ For which no part of the income or corpus may
possibly benefit any beneficiary who is a
Pennsylvania personal income tax taxpayer; and
◦ For which no part of the property consists of property
transferred to it (or another trust) by any Pennsylvania
personal income tax taxpayer.
NOTE: For purposes of the last item above, a
Pennsylvania personal income tax taxpayer means
any individual, estate, trust, partnership, PA S corporation
or entity formed as a limited liability company that is
classified as a partnership or PA S corporation for federal
income tax purposes.

SPECIAL RULES
Before preparation of the PA-41, Fiduciary Income Tax
Return, determine all of the following under the terms of the
governing instrument and the laws applicable to the
administration of estates or trusts:
• Whether an item of receipt or expense is allocable to
corpus or income;
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• Whether payment of a distribution is directed without
reference to the existence or absence of income; and
• Whether the estate or trust must distribute an amount,
and whether it pays such amount out of income or
corpus, or it may pay such amount out of either income
or corpus.
When the governing instrument specifically provides the
source from which amounts are to be permanently set aside
or used, the provisions of the governing instrument control
the distribution and calculation of income.
The governing instrument determines when amounts,
including particular items of income received by the estate
or trust, are set aside or when those amounts are used for
specific purposes. In the absence of specific provisions in
the governing instrument, the amount shall be deemed to
consist of the same proportion of each class of the items of
income of the estate or trust as the total of each class bears
to the total of all classes.
In determining whether income derived from a partnership,
PA S corporation, estate or trust is required to be distributed
currently, or is distributed or credited to a beneficiary, the
excess of the Pennsylvania-taxable income derived through
such partnership, PA S corporation, estate or trust over the
amount of distributions or withdrawals therefrom shall be
considered to be income that is required to be retained,
accumulated or set aside.
Amounts disbursed to pay taxes measured by the income
for another taxable period may not be treated as set aside
from current income.
Generally, amounts disbursed to pay nondeductible trustee
commissions, legal and accounting expenses and other
current expenses that do not reduce the amount of taxable
or nontaxable income or gain of the trust for the taxable year
shall be treated as nontaxable income or gain which is
required to be accumulated, retained or set aside.
This is true as long as total distributions for the year do not
equal or exceed the excess of total taxable and nontaxable
income received by the estate or trust for the taxable year
over total taxable and nontaxable income received by the
estate or trust for the taxable year, which is required to be
accumulated, retained or set aside for future distribution.
However, if total distributions for the year do equal or
exceed the excess of total taxable and nontaxable income
received by the estate or trust for the taxable year over
total taxable and nontaxable income received by the estate
or trust for the taxable year, which is required to be
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accumulated, retained or set aside for future distribution,
the amounts shall be treated as distributions by the estate
or trust and beneficiaries.
If a trust consists in part of intangible investment property,
such as stock or securities, or tangible investment property,
such as real estate located outside Pennsylvania transferred
to it by a person who at the time of the transfer was a
nonresident, the income or gains realized from such
property shall be excludable from tax by the trust.

DEFINITIONS
CHARITABLE TRUST
A charitable trust is one operated exclusively for religious,
charitable, scientific, literary or educational purposes. A trust
is a charitable trust only if all of the net earnings for the
taxable year and remaining life of the trust are for distribution
for such purposes. No part of the earnings of a charitable
trust may benefit any private individual.
Trusts for the general care, maintenance or improvement of
public or church cemeteries are charitable trusts. However,
trusts for the care, maintenance, or improvement of the
burial lots of the settlor, testator or his/her family are not
charitable trusts.
CHARITABLE REMAINDER ANNUITY TRUSTS
(CRATS) AND CHARITABLE REMAINDER
UNITRUSTS (CRUTS)
Charitable Remainder Annuity Trusts (CRATs) and
Charitable Remainder Unitrusts (CRUTs) are trusts
consisting of assets that are designated for a charitable
purpose and are paid over to the trusts after the expiration
of a life estate or intermediate estate.
Federally qualified CRATs and CRUTs are not charitable
trusts if during the current taxable year:
• Any part of the trust’s undistributed income may benefit
any private individual in subsequent years; or
• Any part of the trust's current income is required under
the governing instrument or any applicable state law to
be distributed currently or is actually distributed or
credited to a beneficiary that is not a charitable
organization for which a donor may receive a charitable
contribution deduction for federal income tax purposes.
IMPORTANT: CRATs, charitable remainder trusts,
CRUTs and pooled income fund trusts of public
charities are ordinary trusts that are not exempt from PA-41,
Fiduciary Income Tax Return, filing requirements or taxation.
These types of charitable trusts must file a Pennsylvania
trust tax return, pay tax on any undistributed income, and
report the income to the beneficiary on the same basis as
any other ordinary trust.
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CORPUS
The corpus is principal or property of an estate or trust as
opposed to the income it earns, receives or realizes from
its corpus.
ESTATE
For Pennsylvania personal income tax purposes, an estate
is the estate of a deceased individual.
An estate also includes a taxable bankruptcy estate of a
Chapter 7 or 11 bankruptcy debtor created under Section
1398 of the Internal Revenue Code of 1986. The
Commonwealth is authorized to tax such estates under Title
11, Section 346(a) of the U.S. Bankruptcy Code.
An estate does not include the estate of a minor or
incompetent. The guardian of a minor or incompetent is
required to file income tax returns for such individuals on
Form PA-40.
FIDUCIARY
A fiduciary is an individual, corporation or association
holding assets in trust for another party, often with the legal
authority and duty to make decisions regarding financial
matters on behalf of the other party.
FUNERAL TRUST
A funeral trust is a trust that arises from a contract with a
person engaged in the business of providing funeral or burial
services or property for these services, with the trust assets
designated to pay the funeral expenses of the individual for
whom the trust is established. The trust assets cannot be
distributed until the death of that individual. Funeral trusts
are revocable trusts and are not required to file a PA-41,
Fiduciary Income Tax Return. However, income on the trust
assets is taxed to the taxpayer who contributed the assets
to the trust. See the PA Personal Income Tax Guide –
Estate, Trusts and Decedents section for more information.
GOVERNING INSTRUMENT
The governing or trust instrument is a written document that
defines and describes the nature of and provides
instructions for the administration and settlement of an
estate or trust.
The document can be a deed of trust, will, written trust
agreement, an instrument creating or exercising a power of
appointment or a dispositive, appointive or nominative
instrument of a similar type.
The department does not require a copy of the governing
instrument with the PA-41, Fiduciary Income Tax Return, but
the estate or trust must submit it upon request.
GRANTOR RETAINED ANNUITY TRUSTS (GRATS)
AND GRANTOR RETAINED UNITRUSTS (GRUTS)
GRATs and GRUTs are types of grantor trusts where the
grantor retains an interest in receiving income assets of
the trust.
IMPORTANT: GRATs and GRUTs are ordinary trusts
that are not exempt from PA-41, Fiduciary Income Tax
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Return, filing requirements or taxation. These types of trusts
must file a Pennsylvania trust tax return, pay tax on any
retained earnings, and report the income to the beneficiary
on the same basis as any other ordinary trust.

◦ Stock, securities or intangible personal property,
evidenced by the documents, certificates or other
instruments that are physically located, or have a
business situs within Pennsylvania; or

ELECTING SMALL BUSINESS TRUST
An electing small business trust is any trust that can hold
stock of an S corporation. The term means any trust if:

• The situs of the trust is Pennsylvania as provided in 20
PA. C.S. §7708.

• It does not have as a beneficiary any person other than
an individual, estate or an organization described in IRC
§170(c)(2) and 170(c)(5);
• No interest in such trust was acquired by purchase; and
• An election is made by the trustee applicable to the trust.
GRANTOR TRUST
A grantor trust is a trust in which some or all of the assets
are considered to be owned by the grantor for federal
income tax purposes.
However, Pennsylvania law varies from federal law
regarding grantor trusts and federal rules do not apply for
Pennsylvania fiduciary income tax purposes. Pennsylvania
law imposes the fiduciary income tax on grantor trusts
according to the same Pennsylvania personal income tax
rules that apply to irrevocable trusts, unless the grantor trust
is a revocable trust. See Revocable Trust.
The beneficiaries of the trust are taxed on income required
to be distributed currently or actually distributed or credited
to them. The grantor trust is taxable on the remainder.

PASS-THROUGH ENTITY
A pass-through entity for PA personal income tax purposes is:
• A partnership. A partnership is any unincorporated
entity, including a domestic or foreign general
partnership, joint venture, limited partnership, limited
liability partnership, business trust or investment club
that for federal income tax purposes is classified as a
partnership.
• A Pennsylvania S corporation. A Pennsylvania S
corporation is any corporation that has a valid election
in effect under Subchapter S of Chapter 1 of the Internal
Revenue Code of 1986, as amended to January 1, 2005
and has not elected to not be treated as an S
corporation for Pennsylvania tax purposes. A qualified
subchapter S subsidiary owned by a Pennsylvania S
corporation shall be treated as a Pennsylvania S
corporation without regard to whether an election to not
be treated as an S corporation has been made with
respect to the subsidiary.
• A limited liability company classified as a partnership or
S corporation for federal income tax purposes.

IRREVOCABLE TRUST
An irrevocable trust is a trust that cannot be modified,
amended, changed or terminated by the grantor.

IMPORTANT: A pass-through entity does not include
an estate or trust for Pennsylvania personal income
tax purposes

NONRESIDENT BENEFICIARY
A nonresident beneficiary is a person who is not a resident
beneficiary. See Resident Beneficiary.

PENNSYLVANIA-SOURCE INCOME
Pennsylvania-source income is income derived by the
estate or trust from sources within Pennsylvania. For estates
and trusts, that income is generally derived from:

NONRESIDENT ESTATE
A nonresident estate is any estate that is not a Pennsylvania
resident estate.
NONRESIDENT TRUST
A nonresident trust is any irrevocable trust that is not a
Pennsylvania resident trust. An inter vivos trust or a
testamentary trust created by a resident can become a
nonresident trust if the settlor is no longer a resident or is
deceased, and the trust lacks sufficient contact with
Pennsylvania to establish nexus. Any one of the following
conditions provides sufficient contact for a resident trust to
remain a resident trust or to requalify as a resident trust:
• The trust has a resident trustee;
• Any trust administration occurs in Pennsylvania;
• Trust assets include:
◦ Real or tangible personal property located within
Pennsylvania, or
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• Operation of a business or ownership in a partnership,
S corporation or limited liability company that has
operations wholly or partially within Pennsylvania;
• Ownership of rental property or a partnership, S
corporation or limited liability company that owns rental
property located in Pennsylvania;
• Sales of tangible property located in Pennsylvania;
• Gambling and lottery winnings from a wager placed in
Pennsylvania; and/or
• Estate or trust income from another estate or trust that
has income from any of the above sources.
For additional information on Pennsylvania-source income
and what types of income nonresidents should report, see
the PA Personal Income Tax Guide – Brief Overview and
Filing Requirements for Pennsylvania Income Tax Returns
section.
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PERSON
A person is an individual, estate, trust, association,
partnership or corporation, resident or nonresident, and the
plural as well as the singular number.
PRO-FORMA PA-40 PERSONAL INCOME TAX RETURN
A pro-forma PA-40 Personal Income Tax Return is a return
completed on behalf of the bankruptcy debtor that includes
the income (loss), deductions and credits of the bankruptcy
estate. The pro-forma PA-40 is required to be included with
the PA-41 of the bankruptcy estate. It does not include any
income (loss), deductions or credits that must remain with
the taxpayer who completes a PA-40 to report that income.
QUALIFIED SUBCHAPTER S TRUST (QSST)
A QSST is a type of trust for federal income tax purposes
that is permitted to become a shareholder of an S
corporation if the current individual income beneficiary of the
trust elects to be treated as the owner of the trust for
purposes of the Internal Revenue Code. For PA personal
income tax purposes, the S corporation income will pass
through the S corporation to the trust and will be distributed
from the trust to the trust income beneficiary.
RESIDENT BENEFICIARY
A resident beneficiary is a person who is domiciled in
Pennsylvania unless the person maintains no permanent
place of abode in Pennsylvania and does maintain a
permanent place of abode elsewhere and spends no more
than 30 days of the taxable year in Pennsylvania; or is a
person who is not domiciled in Pennsylvania but maintains
a permanent place of abode in Pennsylvania and spends
more than 183 aggregate days of the taxable year in
Pennsylvania. The fiduciary of an estate or trust must
maintain an accurate list of beneficiaries.
RESIDENT ESTATE OR TRUST
A resident estate is the estate created by an individual who
at the time of his or her death was a Pennsylvania resident.
A resident estate also includes a taxable bankruptcy estate
where the debtor is a Pennsylvania resident on the date of
the filing of the bankruptcy petition.
A resident trust is any of the following:
• A trust created by the will of a decedent who, at the time
of death, was a Pennsylvania resident individual;
• A trust consisting of property transferred to it or another
trust by a settlor or other individual, estate or trust that
at the time of such transfer, was a Pennsylvania
resident; or
• A trust of a person who, at the time of such creation,
was a Pennsylvania resident.
IMPORTANT: A resident trust that believes that it
should be a nonresident trust cannot file an amended
return to declare itself to be a nonresident trust. The trust
must file a Petition for Refund with the Board of Appeals to
have a decision and order issued for changing the residency
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status. See When to Amend the PA-41, Fiduciary Income
Tax Return, for additional information.
REVOCABLE TRUST
A revocable trust is one that can be created by anyone, and
at a later date, be dissolved by the person who originally
created it. Upon dissolution, the assets, if any, that were
placed into the trust revert back to the ownership status they
held before they were assigned to the trust. See SettlorRevocable Trust.
SETTLOR
A settlor is a party who transfers property to a trust.
SETTLOR-REVOCABLE TRUST
A trust is a settlor-revocable trust if it is a totten trust or an
express trust where the trust agreement reserves in the
settlor:
• The power to revoke the trust as an entirety without the
declaration of new uses or the consent of any other
party; and
• The concurrent power to revest in himself or herself
legal title to the corpus of the trust, without the consent
of any other party.
A revocable trust is not a taxable entity for Pennsylvania
purposes. However, the settlor of the revocable trust, if a
nonresident, is required to pay Pennsylvania personal
income tax on the Pennsylvania-source income of the
revocable trust. As a resident, the settlor of a revocable trust
is required to pay Pennsylvania personal income tax on
world-wide income of the revocable trust.
IMPORTANT: Trusts that are classified as grantor
trusts for federal tax purposes often do not constitute
settlor-revocable trusts.
Grantor trusts other than settlor-revocable trusts are taxable
according to the same Pennsylvania personal income tax
rules that apply to other trusts. See Grantor Retained
Annuity Trust and Grantor Retained UniTrust.
TAXABLE BANKRUPTCY ESTATE
A taxable bankruptcy estate is an estate of a Chapter 7 or
11 bankruptcy debtor created under Section 1398 of the
Internal Revenue Code of 1986. The PA taxable income of
the bankruptcy debtor that is attributable to the bankruptcy
estate must be reported by the bankruptcy estate as the
estate’s income. The income of the taxable bankruptcy
estate is subject to PA personal income tax.
TAXABLE TRUST
For Pennsylvania personal income tax purposes, a trust
includes a taxable trust created by a will and any taxable
express trust taking effect during the lifetime or after the
death of the settlor.
TOTTEN TRUST
A type of revocable trust formed under New York law
whereby the grantor deposits his or her own funds in a bank
account in his or her own name as trustee for a beneficiary.
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The grantor retains control over the assets until death or
unequivocal action of the gifting of the property. Any income
of such a trust is the income of the grantor.

PENNSYLVANIA INCOME TAXATION OF
ESTATES AND TRUSTS
TAXABLE INCOME
Estates or Trusts must report taxable income (loss) realized
from the following classes:
• Interest income;
• Dividend income;
• Net income (loss) from the operation of a business,
profession or farm;
• Net gain (loss) from the sale, exchange or disposition
of property;
• Net income (loss) from rents, royalties, patents or
copyrights;
• Estate or trust income; and
• Gambling and lottery winnings.
Compensation from a deceased individual’s final W-2
cannot be reported on a PA-41, Fiduciary Income Tax
Return. This income should be reported on the individual’s
final PA-40, Individual Income Tax Return.
If any of the compensation is paid after an individual’s
death, a letter of explanation must accompany the
individual’s final return advising that the income was
income in respect of a decedent and, therefore, is not
subject to Pennsylvania personal income tax. However,
any Pennsylvania income tax withheld should be included
on the PA-41, Fiduciary Income Tax Return, Line 17. See
Line 17 in these instructions.
Any compensation paid after the individual’s death, plus any
tax refund, must be included as assets of the decedent’s
estate, and as such, are subject to inheritance tax.
COSTS AND EXPENSES
A fiduciary may not deduct:
• Expenses and fees related to administering the estate
or trust;
• Costs and expenses attributable to earning or receiving
interest and dividend income or managing securities
holdings of the estate or trust;
• Costs and expenses attributable to receiving income
from other estates or trusts;
• Inheritance, succession, estate, gift taxes, or taxes
based on income;
• Funeral expenses;
• Expenses for preservation or maintenance of nonincome producing property;
• Expenses related to exempt income; or
• Satisfaction of personal debts of the decedent.
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A fiduciary may deduct only the ordinary, necessary and
reasonable costs and expenses directly incurred in realizing
income (loss) from:
• The operation of a business or farm;
• The sale, exchange, or other disposition of property;
and
• The receipt of rental or royalty income.
GAINS OR LOSSES
Estates or trusts cannot offset income in one
Pennsylvania income class with a loss in any other
Pennsylvania income class.
Estates or trusts cannot carry income or losses back or
forward to other tax years. Include the appropriate
completed schedule for the income, gain (loss) reported.
If the estate or trust realized a net loss in an income
class, enter the amount of the loss on the appropriate
line of the PA-41, Fiduciary Income Tax Return. If a negative
amount, fill in the “loss” oval.
TAXABLE INCOME OF BANKRUPTCY ESTATES
The income of a taxable bankruptcy estate includes income
(loss) realized from all the classes of income for filing a PA40 including compensation, as well as permitting the
deductions for health and medical savings accounts and
IRC Section 529 qualified tuition program contributions and
all credits except Tax Forgiveness. All income, gain, (loss),
deductions and credits allocated to a taxable bankruptcy
estate will be reported on a pro-forma PA-40 Personal
Income Tax Return and must be included with the PA-41 of
the bankruptcy estate.
TAX WITHHELD FOR NONRESIDENT BENEFICIARIES
Under Act 52 of 2013, an estate or trust that receives
Pennsylvania-source income and has beneficiaries who are
nonresident individuals, nonresident estates or nonresident
trusts must withhold and remit Pennsylvania personal
income tax on each beneficiary’s share of Pennsylvaniasource taxable income that is distributed (or required to be
distributed under the governing instrument) or credited to
the beneficiary. The nonresident beneficiary withholding will
be remitted with the estate or trust’s PA-41 return or with
REV-276, Application for Extension of Time to File, by the
due date of the original return without regard to extension.
The estate or trust is required to withhold on all
Pennsylvania-source income that is distributed (or required
to be distributed under the governing instrument) or credited
to a nonresident beneficiary beginning with distributions
made for tax years beginning after Dec. 31, 2013. The
withholding rate is 3.07 percent (0.0307). The nonresident
beneficiary withholding will be due by the original due date
of the PA-41 return. Nonresident beneficiary withholding will
not be subject to estimated underpayment penalties but will
be subject to late payment and late filing penalties as well
as interest on any unpaid amounts.
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Individuals who are nonresidents and nonresident estates
and trusts are subject to the tax withholding for nonresident
beneficiaries.
An estate or trust does not have to withhold on the following
individual and entity beneficiaries:
• Pennsylvania residents;
• Corporations with a permanent place of business in
Pennsylvania;
• Tax-exempt organizations under either Pennsylvania or
federal law;
• IRAs or qualified pension/profit sharing plans;
• Estates where the decedent was a Pennsylvania
resident at the time of death; or
• Trusts that are revocable trusts.
Withholding is required whether the distribution is made up
of cash and/or an “in-kind” distribution of property of
Pennsylvania-source income.
If an in-kind distribution of property is made to a nonresident
beneficiary and the fair market value of the distributed
property is in excess of the beneficiary’s taxable PA-source
income, the nonresident withholding tax attributable to the
nonresident beneficiary must equal the amount of the
taxable PA-source income for the nonresident beneficiary
times 3.07 percent (0.0307) even if no cash is received by
the nonresident beneficiary. If the in-kind distribution is made
to a nonresident beneficiary and the fair market value of the
distributed property is less than beneficiary’s taxable PAsource income, the nonresident withholding for the
nonresident beneficiary must equal the amount of the
taxable PA-source income for the nonresident beneficiary
times 3.07 percent (0.0307).
Withholding tax for a nonresident beneficiary does not
exempt the nonresident beneficiary from the requirements
for filing a return. A nonresident beneficiary must file a
Pennsylvania tax return if they have at least $33 of income
from Pennsylvania sources regardless of whether or not the
tax that is due on their Pennsylvania-source income has
been paid in by the estate or trust via the withholding.

INCOME REQUIRED TO BE
DISTRIBUTED CURRENTLY

distribute all the income currently, but has discretion to
sprinkle or spray the income among a class of beneficiaries,
or among named beneficiaries, in such amount as he/she
may see fit, all the income is required to be distributed
currently, even though the amount distributable to a
particular beneficiary is unknown until the fiduciary has
exercised his/her discretion.
ESTATES, TRUSTS AND BENEFICIARIES
The taxable income of an estate or taxable trust is the
current income that it retains for future distribution or
disbursement or currently applies to discharge, satisfy or
reduce any person’s or its own obligations. Each estate or
taxable trust must classify and report all income, gains
and losses realized in the appropriate Pennsylvania
income classes.
The estate or trust must also submit PA-41 Schedules RK1 for resident individual beneficiaries and PA-41 Schedules
NRK-1 for nonresident individual beneficiaries with the
estate or trust’s PA-41, Fiduciary Income Tax Return.
If the beneficiary is an entity such as a partnership, PA S
corporation, estate or trust, the estate or trust completing
the PA-41, Fiduciary Income Tax Return, must provide the
entity with both a PA-41 Schedule RK-1 and NRK-1 showing
the entity beneficiary’s share of taxable income.
The PA-41 Schedules RK-1 and NRK-1 show all of the
distributions to each of its beneficiaries. The estate or trust
must provide each beneficiary with a personalized PA-41
Schedule RK-1 and/or NRK-1, showing that beneficiary’s
share of its 2023 Pennsylvania-taxable income.
A taxable trust (and its beneficiaries) and an estate (and
its beneficiaries) are not subject to tax on income that is
set aside exclusively for charitable purposes. See
Charitable Trust.
TAXABLE BANKRUPTCY ESTATES
A taxable bankruptcy estate does not distribute estate
income to a beneficiary. Consequently, a taxable
bankruptcy estate cannot claim a distribution deduction. All
the income of the bankruptcy estate is the taxable income
of the bankruptcy estate for Pennsylvania personal income
tax purposes.

Income required to be distributed currently is income for the
taxable year that the fiduciary is under a duty to distribute.
The determination of whether trust income is required to be
distributed currently depends upon the terms of the trust
instrument and the applicable local law. Income required to
be distributed currently is taxable as such even if, as a
matter of practical necessity, it is not actually distributed until
after the close of the trust’s taxable year.

OWNERS OF PARTNERSHIPS AND
PA S CORPORATIONS
If the estate or trust is an owner of a partnership or a PA
S corporation, the estate or trust must report its share of
the income (loss), whether distributed or not, in the same
class in which the partnership or PA S corporation
reported the income.

It is immaterial, for purposes of determining whether income
is required to be distributed currently, that the amount of
income allocated to a particular beneficiary is not specified
in the instrument. For example, if the fiduciary is required to

Each resident estate or trust must submit the PA-20S/PA65 Schedule RK-1 and each nonresident estate or trust
must submit the PA-20S/PA-65 Schedule NRK-1 received
from the partnership or PA S corporation.

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CREDIT FOR TAXES PAID BY PENNSYLVANIA
RESIDENT ESTATES OR TRUSTS TO OTHER STATES
Pennsylvania taxes the income of a resident estate or trust
from sources both inside and outside Pennsylvania.
A resident estate or trust may claim a resident credit if it is
subject to and pays income tax to another state on income
that is also taxable to Pennsylvania during the same taxable
year. This credit is nonrefundable, cannot exceed the
amount of the total Pennsylvania tax liability of the estate or
trust and may not be passed through to a beneficiary.
To claim a resident credit, the estate or trust must submit a
completed PA-40/PA-41 Schedule G-L. See Line 15 for
additional information.
RESIDENT BENEFICIARY
The taxable income of a resident beneficiary from a resident
or nonresident estate or trust is the taxable income,
regardless of source, received by the estate or trust for the
taxable year that:
• Is required to be distributed currently to the beneficiary, or
• Is credited or distributed to the beneficiary.
NONRESIDENT BENEFICIARY
The taxable income of a nonresident beneficiary from a
resident or nonresident estate or taxable trust is the taxable
income from Pennsylvania sources received by the estate
or trust for its taxable year that the estate or trust distributed,
was required to distribute currently or was credited to the
beneficiary. Withholding at the rate of 3.07 percent (0.0307)
is required on the taxable income of a nonresident
beneficiary individual or estate or trust.
QSSTs
For Pennsylvania personal income tax purposes, all the
income reported to an irrevocable QSST is required to be
distributed to the income beneficiaries. The income is reported
to the trust in the various classes of income as reported on PA
Schedules RK-1 or NRK-1. However, the income is distributed
to the income beneficiaries as trust income.
If the income beneficiary is a nonresident beneficiary,
withholding at the rate of 3.07 percent (0.0307) is required
on the taxable income. The trust withholding must be paid
via tax withheld by the S corporation or by separate payment
on behalf of the trust by the fiduciary or income beneficiary
when the PA-41, Fiduciary Income Tax Return, is filed for
the QSST.

WHAT TO FILE
See the PA-41, Fiduciary Income Tax Return, individual
schedules and instructions to determine what to include with
the PA-41, Fiduciary Income Tax Return. Also refer to
Assembling the PA-41, Fiduciary Income Tax Return.
INCOME TAX RETURNS OF ESTATES OR TRUSTS
An executor or administrator must file a PA-41, Fiduciary
Income Tax Return, if he or she is a fiduciary of:
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• A resident estate or trust that received taxable income
during its taxable year;
• A nonresident estate or trust that received taxable
income allocable to Pennsylvania during its taxable
year; or
• A nonresident estate or trust that has a resident
beneficiary.
If the department requests, the fiduciary of an estate or trust
must file a copy of the will or trust instrument (including
amendments), a written declaration under the penalties of
perjury that the instrument is a true and complete copy, and
a statement indicating which provisions, in the fiduciary’s
opinion, determine the extent of taxable income to the estate
or trust or the beneficiaries.
INCOME TAX RETURNS OF RESIDENT ESTATES OR
TRUSTS AS OWNERS IN PARTNERSHIPS
Pennsylvania taxes the income of a resident estate or trust
from sources both inside and outside of Pennsylvania. If
the estate or trust distributes the income to its
beneficiaries, it is taxable to the beneficiaries and not the
estate or trust. Any income not distributed by the estate or
trust is subject to tax on the PA-41, Fiduciary Income Tax
Return of the estate or trust.
If the resident estate or trust is an owner in a partnership,
or entity formed as a limited liability company that is
classified as a partnership for federal income tax purposes,
the estate or trust should receive a PA-20S/PA-65
Schedule RK-1 and a PA-20S/PA-65 Schedule NRK-1 from
the partnership.
Although a resident estate or trust receives both the PA20S/PA-65 Schedules RK-1 and Schedules NRK-1 from the
partnership, a resident estate or trust must only submit a
copy of the PA-20S/PA-65 Schedule RK-1 from each
partnership and report its share of income whether
distributed or not as shown on their PA-20S/PA-65
Schedules RK-1 from the partnership.
A PA-20S/PA-65 Schedule NRK-1 is also required to report
Pennsylvania-source income necessary to calculate the
amounts for PA-41 Schedule DD for nonresident
beneficiaries. See the PA-41 Schedule DD instructions on
the department’s website.
The copy of the PA-20S/PA-65 Schedule NRK-1 is not
required to be included with a resident estate or trust tax
return. However, the PA-20S/PA-65 Schedule NRK-1 is
required to be included with a nonresident estate or trust
tax return. See Nonresident Estates or Trusts as Owners
in Partnerships.
If the partnership or limited liability company does not
provide PA-20S/PA-65 Schedules RK-1 or NRK-1 to the
estate or trust, the estate or trust still must report and classify
the income (loss) from federal Form 1065 Schedule K-1
according to the instructions for each Pennsylvania income
class. The estate or trust must then submit a copy of federal
Form 1065 Schedule K-1 and related supporting schedules
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where applicable that provide information as to the
classification of the income from the federal Form 1065
Schedule K-1.
INCOME TAX RETURNS OF RESIDENT ESTATES OR
TRUSTS AS OWNERS IN PA S CORPORATIONS
Pennsylvania taxes the income of a resident estate or trust
from sources both inside and outside of Pennsylvania. If
the estate or trust distributes the income to its
beneficiaries, it is taxable to the beneficiaries and not the
estate or trust. Any income not distributed by the estate or
trust is subject to tax on the PA-41, Fiduciary Income Tax
Return of the estate or trust.
If the resident estate or trust is an owner in a PA S
corporation or entity formed as a limited liability company
that is classified as a PA S corporation for federal income
tax purposes, the estate or trust should receive a PA20S/PA-65 Schedule RK-1 and a PA-20S/PA-65 Schedule
NRK-1 from each PA S corporation.
Although a resident estate or trust receives both the PA20S/PA-65 Schedules RK-1 and Schedules NRK-1 from the
PA S corporation, a resident estate or trust must only submit
a copy of the PA-20S/PA-65 Schedule RK-1 from each PA
S corporation and report its share of income whether
distributed or not as shown on their PA-20S/PA-65
Schedules RK-1 from the PA S corporation.
A PA-20S/PA-65 Schedule NRK-1 is also required to report
Pennsylvania-source income necessary to calculate the
amounts for PA-41 Schedule DD for nonresident
beneficiaries. See the PA-41 Schedule DD instructions on
the department’s website.
The copy of the PA-20S/PA-65 Schedule NRK-1 is not
required to be included with a resident estate or trust tax
return. However, the PA-20S/PA-65 Schedule NRK-1 is
required to be included with a nonresident estate or trust tax
return. See Nonresident Estates or Trusts as Owners in PA
S Corporations.
If the estate or trust receives only a federal Form 1120S
Schedule K-1, the estate or trust must obtain a PA-20S/PA65 Schedule RK-1 from the entity. The department will only
permit the estate or trust to adjust and reclassify the income
from the federal Form 1120S Schedule K-1 according to
Pennsylvania rules in limited circumstances. See the PA
Personal Income Tax Guide – Pass Through Entities section
for additional information on the adjustments required and
the proper classification of income.
INCOME TAX RETURNS OF NONRESIDENT ESTATES
OR TRUSTS AS OWNERS IN PARTNERSHIPS
Pennsylvania law imposes fiduciary income tax on the
income of a nonresident estate or trust from Pennsylvania
sources. A nonresident estate or trust must ignore items of
income (loss), cost, expense and liability that are not directly
related to Pennsylvania when calculating its Pennsylvaniataxable income.
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If the nonresident estate or trust is an owner in a
partnership, the partnership must provide the nonresident
estate or trust a PA-20S/PA-65 Schedule RK-1 and a PA20S/PA-65 Schedule NRK-1 showing the nonresident estate
or trust’s share of Pennsylvania-taxable income (loss)
whether distributed or not. The federal Form 1065 Schedule
K-1 is not an acceptable substitute.
When the nonresident estate or trust, as an owner in a
partnership, receives a PA-20S/PA-65 Schedule RK-1 and
NRK-1 from another entity, it has the classified income (loss)
amount to complete the PA-41, Fiduciary Income Tax
Return. The nonresident estate or trust, as an owner in a
partnership, is required to file both the PA-20S/PA-65
Schedule RK-1 and NRK-1 with their PA-41, Fiduciary
Income Tax Return.
Example. When a nonresident estate or trust receives
income from a partnership, the nonresident estate or trust
must file a copy of the PA Schedule RK-1 and NRK-1 it
received from the partnership along with the PA-41,
Fiduciary Income Tax Return.
Each nonresident estate or trust, as an owner in a
partnership, must submit with the PA-41, Fiduciary Income
Tax Return:
• A complete copy of its federal income tax return including
all schedules, statements, federal schedules K-1;
• A copy of PA-20S/PA-65 Schedules RK-1 that it
provides to its resident beneficiaries;
• A copy of PA-20S/PA-65 Schedules NRK-1 that it
provides to its nonresident beneficiaries;
• The PA-20S/PA-65 Schedules RK-1 and NRK-1 that the
nonresident estate or trust received from other entities,
whether the income was distributed or not.
If the partnership or entity formed as a limited liability
company that is classified as a partnership for federal
income tax purposes has Pennsylvania-source income but
does not provide to the nonresident estate or trust a PA20S/PA-65 Schedule RK-1 and NRK-1, the nonresident
estate or trust still must report and classify the income (loss)
from federal Form 1065 Schedule K-1 according to the
instructions for each Pennsylvania income class.
The nonresident estate or trust, as an owner in a
partnership, must then submit a copy of its federal Form
1065 Schedule K-1 and related supporting schedules where
applicable that provide information as to the classification of
the income from the federal Form 1065 Schedule K-1. If the
income (loss) is being reported to Pennsylvania from a
federal Form 1065 Schedule K-1 and the income (loss) is
not 100 percent of the amount from the federal Form 1065
Schedule K-1, a schedule or written explanation must be
submitted along with the federal Form 1065 Schedule K-1
explaining how the amount reported was determined.
If a nonresident estate or trust does not have resident
beneficiaries, the nonresident estate or trust reports
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Pennsylvania-source income in the appropriate classes on
the PA-41, Fiduciary Income Tax Return.
If a nonresident estate or trust has resident beneficiaries,
the nonresident estate or trust reports worldwide income
in the appropriate classes on the PA-41, Fiduciary Income
Tax Return.
INCOME TAX RETURNS OF NONRESIDENT ESTATES
OR TRUSTS AS OWNERS IN PA S CORPORATIONS
Pennsylvania law imposes fiduciary income tax on the
income of a nonresident estate or trust from Pennsylvania
sources. A nonresident estate or trust must ignore items of
income (loss), cost, expense and liability that are not directly
related to Pennsylvania when calculating its Pennsylvaniataxable income.
If the nonresident estate or trust is an owner in a PA S
corporation, the PA S corporation must provide the
nonresident estate or trust a PA-20S/PA-65 Schedule RK-1
and NRK-1 showing the nonresident estate or trust’s share
of Pennsylvania-taxable income (loss) whether distributed
or not. The federal Form 1120S Schedule K-1 is not an
acceptable substitute.
When the nonresident estate or trust, as an owner in a PA
S corporation, receives a PA-20S/PA-65 Schedule RK-1
and NRK-1 from another entity, it has the classified
income (loss) amount to complete the PA-41, Fiduciary
Income Tax Return.
The nonresident estate or trust, as an owner in a PA S
corporation, is required to file both the PA-20S/PA-65
Schedule RK-1 and NRK-1 with their PA-41, Fiduciary
Income Tax Return.
Example. When a nonresident estate or trust receives
income from a PA S corporation, the nonresident estate or
trust must file a copy of the PA Schedules RK-1 and NRK-1
it received from the PA S corporation along with the PA-41,
Fiduciary Income Tax Return.
Each nonresident estate or trust, as an owner in a PA S
corporation, must submit with the PA-41, Fiduciary Income
Tax Return:
• A complete copy of its federal income tax return
including all schedules, statements, federal schedules
K-1;
• A copy of PA-20S/PA-65 Schedules RK-1 that it
provides to its resident beneficiaries;
• A copy of PA-20S/PA-65 Schedules NRK-1 that it
provides to its nonresident beneficiaries; and
• The PA-20S/PA-65 Schedules RK-1 and NRK-1 that the
nonresident estate or trust received from other entities,
whether the income was distributed or not. If the PA S
corporation or entity formed as a limited liability
company that is classified as a PA S corporation for
federal income tax purposes has Pennsylvania-source
income but does not provide to the nonresident estate
or trust a PA-20S/PA-65 Schedule RK-1 and NRK-1, the
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nonresident estate or trust still must report and classify
the income (loss) from federal Form 1120S Schedule K1 according to the instructions for each Pennsylvania
income class.
If the nonresident estate or trust receives only a federal
Form 1120S Schedule K-1, the nonresident estate or trust
must obtain a PA-20S/PA-65 Schedule RK-1 from the
entity. The department will only permit the nonresident
estate or trust to adjust and reclassify the income from the
federal Form 1120S Schedule K-1 according to
Pennsylvania rules in limited circumstances. See the PA
Personal Income Tax Guide – Pass Through Entities
section, for additional information on the adjustments
required and the proper classification of income.
If a nonresident estate or trust does not have resident
beneficiaries, the nonresident estate or trust reports
Pennsylvania-source income in the appropriate classes on
the PA-41, Fiduciary Income Tax Return.
If a nonresident estate or trust has resident beneficiaries,
the nonresident estate or trust reports worldwide income
in the appropriate classes on the PA-41, Fiduciary Income
Tax Return.
INCOME TAX RETURNS OF NONRESIDENT ESTATES
OR TRUSTS WITH RESIDENT BENEFICIARIES
Pennsylvania law requires a nonresident estate or trust
with resident beneficiaries to file a PA-41, Fiduciary
Income Tax Return, regardless of whether there is
Pennsylvania-source income or not. The nonresident
estate or trust must report the worldwide income in the
appropriate classes on the PA-41, Fiduciary Income Tax
Return. The nonresident estate or trust must also report
its worldwide income and calculate the amounts for PA41 Schedule DD. See the PA-41 Schedule DD instructions
on the department’s website. A nonresident estate or trust
must provide each resident beneficiary with a PA-41
Schedule RK-1 showing the resident beneficiary’s share
of the distributed/distributable income.
A nonresident estate or trust with a Pennsylvania resident
beneficiary must include a copy of the resident state’s
fiduciary income tax return or a copy of an affidavit
certifying the state of residency of the estate or trust if the
estate or trust’s state of residency does not have an
income tax. In addition, the nonresident estate or trust
must include a copy of federal Form 1041 with the PA-41,
Fiduciary Income Tax Return.
Further, when a nonresident estate or trust with resident
beneficiaries is an owner in a PA S corporation, partnership
or entity formed as a limited liability company that is classified
as a partnership or PA S corporation for federal income tax
purposes, the estate or trust must submit a copy of each of
the PA-20S/PA65 Schedules RK-1 and PA-20S/PA-65
Schedules NRK-1 that it receives from each entity. The
nonresident estate or trust must also report its worldwide
income and calculate the amounts for PA-41 Schedule DD.
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See the PA-41 Schedule DD instructions on the department’s
website.
INCOME TAX RETURNS OF NONRESIDENT ESTATES
OR TRUSTS WITH NONRESIDENT BENEFICIARIES
A nonresident estate or trust with no resident beneficiaries
that is an owner in a PA S corporation, partnership or entity
formed as a limited liability company that is classified as a
partnership or PA S corporation for federal income tax
purposes must only submit a copy of the PA-20S/PA-65
Schedules NRK-1 that it receives from each entity with its
PA-41, Fiduciary Income Tax Return. If a nonresident estate
or trust does not have resident beneficiaries, the
nonresident estate or trust must only report Pennsylvaniasource income in the appropriate classes on the PA-41,
Fiduciary Income Tax Return. The nonresident estate or
trust must report its Pennsylvania-source income and
calculate the amounts for PA-41 Schedule DD, Column B.
The nonresident estate or trust must calculate and include
its worldwide income and calculate the amounts for PA-41
Schedule DD, Column A. See the PA-41 Schedule DD
instructions on the department’s website.
INCOME TAX RETURNS OF PENNSYLVANIA
RESIDENT ESTATES OR TRUSTS AS BENEFICIARIES
OF PENNSYLVANIA ESTATES OR TRUSTS
If the estate or trust is a beneficiary of a Pennsylvania estate
or trust, the estate or trust beneficiary should receive a PA41 Schedule RK-1 and PA-41 Schedule NRK-1 from the
Pennsylvania estate or trust entity.
A PA-41 Schedule RK-1 reports worldwide income
necessary to calculate the amounts for PA-41 Schedule DD.
See the PA-41 Schedule DD instructions on the
department’s website.
As a resident beneficiary of a resident estate or trust, the
resident estate or trust reports the income from the
Pennsylvania estate or trust reports the income from the PA41 Schedule RK-1, Line 1 on PA-41 Schedule J and on the
PA-41, Fiduciary Income Tax Return, Line 6.
A PA-41 Schedule NRK-1 reports the Pennsylvania-source
income to calculate amounts for Column b on PA-41
Schedule DD when there are nonresident beneficiaries. See
the PA-41 Schedule DD instructions on the department’s
website. If there are no nonresident beneficiaries, the PA41 Schedule NRK-1 is not used by estates or trusts.
IMPORTANT: An estate or trust as a beneficiary
should receive PA-41 Schedules RK-1 and NRK-1, if
it has income from a resident estate or trust. It is important
to remember that the PA-41 Schedules RK-1 and NRK-1
submitted to the resident beneficiary should reflect the
taxable income to Pennsylvania residents even if the estate
or trust is a nonresident.
If the nonresident estate or trust does not provide to the
Pennsylvania estate or trust a PA-41 Schedule RK-1 and
NRK-1, the Pennsylvania estate or trust still must include
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1 as a single class of income; estate or trust income. The
income from the federal Form 1041 Schedule K-1 should be
added together to arrive at the estate or trust income to be
reported for PA purposes. However, if any losses are
reported on the federal Form 1041 Schedule K-1, only
losses within the same PA class of income (usually gain or
loss on the sale, exchange or disposition of property) may
be netted with other gains in the same PA class of income.
Losses from different PA classes of income may not be
netted against income from another PA class of income
when calculating the income from a federal Form 1041
Schedule K-1. A copy of the federal Form 1041 Schedule K1 is required to be included with the PA-41, Fiduciary
Income Tax Return.
If the estate or trust beneficiary receives a PA-41 Schedule
RK-1 or NRK-1, a copy of that document is not required to
be submitted with the PA-41, Fiduciary Income Tax Return.
A PA-41 Schedule RK-1 reports worldwide income
necessary to calculate the amounts for PA-41 Schedule DD.
See the PA-41 Schedule DD instructions on the
department’s website.
As a resident beneficiary of a resident estate or trust, the
resident estate or trust reports the income from the PA-41
Schedule RK-1, Line 1 on PA-41 Schedule J and on the PA41, Fiduciary Income Tax Return, Line 6.
A PA-41 Schedule NRK-1 reports the Pennsylvania-source
income to calculate amounts for Column b on PA-41
Schedule DD when there are nonresident beneficiaries. See
the PA-41 Schedule DD instructions on the department’s
website. If there are no nonresident beneficiaries, the PA41 Schedule NRK-1 is not used by estates or trusts.
INCOME TAX RETURNS OF PENNSYLVANIA
RESIDENT ESTATES OR TRUSTS AS BENEFICIARIES
OF NONRESIDENT ESTATES OR TRUSTS
If the Pennsylvania estate or trust is a beneficiary of a
nonresident estate or trust, the nonresident estate or trust
may provide the Pennsylvania estate or trust beneficiary
with a PA-41 Schedule RK-1 and NRK-1 showing the estate
or trust’s share of Pennsylvania-taxable income (loss)
whether distributed or not if the estate or trust is required to
file the PA-41, Fiduciary Income Tax Return. See Who Must
File and Who Does Not File.
If the nonresident estate or trust does not provide to the
Pennsylvania estate or trust a PA-41 Schedule RK-1 and
NRK-1, the Pennsylvania estate or trust still must include and
report the income from federal Form 1041 Schedule K-1 as
a single class of income; estate or trust income. The income
from the federal Form 1041 Schedule K-1 should be added
together to arrive at the estate or trust income to be reported
for PA purposes. However, if any losses are reported on the
federal Form 1041 Schedule K-1, only losses within the
same PA class of income (usually gain or loss on the sale,
exchange or disposition of property) may be netted with other
gains in the same PA class of income. Losses from different
PA classes of income may not be netted against income from
PA-41
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another PA class of income when calculating the income
from a federal Form 1041 Schedule K-1. A copy of the federal
Form 1041 Schedule K-1 is required to be included with the
PA-41, Fiduciary Income Tax Return.
If the estate or trust beneficiary receives a PA-41 Schedule
RK-1 or NRK-1, a copy of that document is not required to
be submitted with the PA-41, Fiduciary Income Tax Return.
A PA-41 Schedule RK-1 reports worldwide income
necessary to calculate the amounts for PA-41 Schedule DD.
See the PA-41 Schedule DD instructions on the
department’s website.
As a resident beneficiary of a nonresident estate or trust,
the resident estate or trust reports the income from the PA41 Schedule RK-1, Line 1 on PA-41 Schedule J and on the
PA-41, Fiduciary Income Tax Return, Line 6.
A PA-41 Schedule NRK-1 reports the Pennsylvania-source
income to calculate amounts for Column b on PA-41
Schedule DD when there are nonresident beneficiaries. See
the PA-41 Schedule DD instructions on the department’s
website. If there are no nonresident beneficiaries, the PA41 Schedule NRK-1 is not used by estates or trusts.
INCOME TAX RETURNS OF RESIDENT TAXABLE
BANKRUPTCY ESTATES
If the bankruptcy debtor is a resident of Pennsylvania, the
bankruptcy estate must file a PA-41 including only the
portion of the bankruptcy debtor’s income allocated to the
bankruptcy estate. The income to be reported is included on
a pro-forma PA-40 prepared as if it were the income of the
resident bankruptcy debtor. The Adjusted PA Taxable
Income from Line 11 of the pro-forma PA-40 will be reported
on PA-41 Schedule J and on Line 6 of the PA-41. Taxes
withheld, estimated tax payment and credits (except the Tax
Forgiveness Credit) from Lines 13, 14, 15, 17, 22 and 23 of
the pro-forma PA-40 will also be reported as payments and
credits for the bankruptcy estate.
The pro-forma return is prepared including only the
bankruptcy estate’s allocated world-wide income using the
requirements and attachment of schedules for a PA-40. The
pro-forma PA-40 must be included with the PA-41 of the
bankruptcy estate as supporting documentation for the PA41 Schedule J. To clearly distinguish the pro-forma PA-40
of the bankruptcy estate from the regular PA-40 of the
taxpayer, write in all capital letters, “PRO-FORMA RETURN”
across the top of the bankruptcy-related return.
INCOME TAX RETURNS OF NONRESIDENT TAXABLE
BANKRUPTCY ESTATES
If the bankruptcy debtor is a nonresident of Pennsylvania
and the bankruptcy estate has PA-source income, the
bankruptcy estate must file a PA-41 including only that
portion of the bankruptcy debtor’s PA-source income
allocated to the bankruptcy estate