Estates and Trusts Returns

The federal taxable income of the fiduciary is the starting point for preparing a North Carolina Income Tax Return for Estates and Trusts, Form D-407, and requires the same additions and deductions. An addition is also required for the amount of state, local, or foreign income tax deducted on the federal return.

The fiduciary responsible for administering the estate or trust is responsible for filing the return and paying the tax. The fiduciary must file an income tax return for the estate or trust for which he acts if he is required to file a federal return for estates and trusts and (1) the estate or trust derives income from North Carolina sources or (2) the estate or trust derives any income which is for the benefit of a resident of North Carolina.

The return is required to be filed on or before April 15 if on a calendar year basis and on or before the 15th day of the fourth month following the end of the fiscal year if on a fiscal year basis. However, for tax year 2016, the due date is Tuesday, April 18, 2017, because April 15 is a Saturday and April 17 is the Emancipation Day holiday observed in the District of Columbia.

Fiduciaries should be consistent in the use of the name and address of an estate or trust on a return. If a different name for an estate or trust is used in any year from that used in a prior year, that fact should be noted on the first page of the return and the name used in the prior year indicated. The use of numbers assigned by banks to trusts is also helpful in the processing of trust returns after they are filed.