About the Trust Income Tax Calculator
This trust tax calculator estimates the 2026 federal income tax a non-grantor trust or a decedent’s estate owes on Form 1041. Enter the income the trust earned — interest, rents and other ordinary income, qualified dividends and net long-term capital gains — along with deductible fees and the income distributed to beneficiaries, and it returns taxable income, regular tax, the 3.8% net investment income tax and the effective rate.
Trusts and estates reach the top 37% bracket at just $16,000 of taxable income in 2026 (IRS Rev. Proc. 2025-32), compared with $640,600 for a single person. Their 0% capital gains rate ends at $3,300 and the 20% rate starts above $16,250, and the 3.8% NIIT applies to undistributed investment income above $16,000. That compression is why trustees often distribute income to beneficiaries, who usually pay tax at lower rates; the calculator shows what the same income would cost a single individual for comparison.
The model assumes capital gains are allocated to principal (so they stay in the trust), that distributions carry out ordinary income and qualified dividends proportionally up to distributable net income (DNI), and that all income is investment income for NIIT. Grantor trusts are not taxed on Form 1041 — their income is reported by the grantor — and state trust taxes are not included.
With the default inputs, the total federal tax (form 1041) is $15,846.20. Change any value above to recalculate instantly.
How to use the trust income tax calculator
- 1Choose whether it is a complex trust, simple trust, estate or qualified disability trust.
- 2Enter the year’s ordinary income, qualified dividends and long-term capital gains.
- 3Enter deductible expenses such as trustee and tax preparation fees.
- 4Enter income distributed to beneficiaries during the year (or within 65 days after year-end, if elected).
- 5Compare the trust’s tax with what a single beneficiary would pay on the same income.
Formula and method
Taxable income (TI) is gross income minus deductible expenses, the income distribution deduction and the §642(b) exemption ($600 for an estate, $300 for a trust required to distribute all income, $100 for other trusts, $5,300 for a qualified disability trust in 2026). The distribution deduction cannot exceed distributable net income (DNI), which here is ordinary income plus qualified dividends minus expenses; capital gains are treated as principal. Distributions are assumed to carry out ordinary income and qualified dividends in proportion.
The ordinary part of taxable income is taxed at 10% up to $3,300, 24% to $11,700, 35% to $16,000 and 37% above. Retained qualified dividends and long-term gains (P) are stacked on top and taxed at 0% up to $3,300 of total taxable income, 15% up to $16,250 and 20% above. The net investment income tax is 3.8% of the lesser of undistributed net investment income (UNII) or adjusted gross income above $16,000; for a trust, AGI already reflects the exemption and distribution deduction.
- TI
- Trust or estate taxable income
- DNI
- Distributable net income (caps the distribution deduction)
- P
- Retained qualified dividends plus net long-term capital gains
- UNII
- Undistributed net investment income
Worked examples
Complex trust retaining $60,000 of income
Income of $60,000 minus $2,000 of fees and the $100 exemption gives $57,900 taxable. The $27,900 ordinary part costs $3,851 + 37% × $11,900 = $8,254, and the $30,000 of dividends and gains all fall above $16,250 so they are taxed at 20% ($6,000). NIIT is 3.8% × ($57,900 − $16,000) = $1,592.20, for $15,846.20 in total. A single individual would owe just $1,190 on the same income.
Same trust distributes $20,000 to beneficiaries
DNI is $38,000, so the full $20,000 is deductible and carries out 52.6% of the qualified dividends. Taxable income falls to $37,900 with $24,737 taxed at capital gains rates; regular tax drops to about $7,651 and NIIT to $832.20. The beneficiaries report the $20,000 on their own returns.
Estate earning $12,000 of interest
The estate deducts $1,000 of fees and its $600 exemption, leaving $10,400. Tax is $330 on the first $3,300 plus 24% of $7,100 = $2,034. Taxable income is below $16,000, so no NIIT applies.
Simple trust distributing all income but keeping a $50,000 gain
The trust distributes all $37,000 of DNI, so only the $50,000 gain (less the $300 exemption) is taxed: 0% on $3,300, 15% on the next $12,950 ($1,942.50) and 20% on $33,450 ($6,690). NIIT is 3.8% × ($49,700 − $16,000) = $1,280.60.
Frequently asked questions
What are the 2026 trust tax brackets?+
For 2026, trust and estate taxable income is taxed at 10% up to $3,300, 24% from $3,300 to $11,700, 35% from $11,700 to $16,000 and 37% above $16,000 (Rev. Proc. 2025-32). Long-term gains and qualified dividends are taxed at 0% up to $3,300, 15% up to $16,250 and 20% above.
Why are trust tax rates so high?+
Congress compressed the trust brackets so that wealthy families cannot park income in trusts to use extra low brackets. A trust reaches the 37% rate at $16,000, while a single person reaches it at $640,600 in 2026, so retaining income in a trust is usually expensive.
Who pays tax on trust income that is distributed?+
The beneficiaries. The trust deducts distributions up to its distributable net income and issues each beneficiary a Schedule K-1 showing the income’s character (interest, dividends, etc.), which they report on their own Form 1040 at their own rates.
Do grantor trusts file Form 1041 and pay this tax?+
No. A grantor trust, including most revocable living trusts during the grantor’s life, is ignored for income tax purposes. Its income is reported on the grantor’s personal return. These compressed brackets apply only to non-grantor trusts and estates.
When must a trust file Form 1041?+
A trust or estate must file Form 1041 if it has any taxable income, gross income of $600 or more, or a nonresident alien beneficiary. Calendar-year returns are due April 15, and trusts with expected tax of $1,000 or more generally must make quarterly estimated payments.
What is the 65-day rule?+
Under IRC §663(b), a complex trust or estate can elect to treat distributions made within the first 65 days of the next year as made in the prior tax year. That lets trustees see the final numbers before deciding how much income to distribute.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.