Schedule CT-1041FA: Fiduciary Allocation (2024)
Connecticut · Connecticut DRS · Used for tax years 2024
Schedule CT-1041FA, Fiduciary Allocation, reports a trust or estate’s and its beneficiaries’ shares of income from Connecticut sources and PE tax credits. It also calculates allocated Connecticut tax for nonresident estates and trusts and part-year resident trusts and is attached
Who files this form
Complete Schedule CT-1041FA and attach it to Form CT-1041 for:
- A nonresident trust or estate with income from or connected with Connecticut sources.
- A part-year resident trust.
- A resident trust or estate with a nonresident beneficiary.
- A resident inter vivos trust with one or more nonresident, noncontingent beneficiaries.
- A resident trust or estate with only resident beneficiaries that is claiming a pass-through entity (PE) tax credit.
Schedule CT-1041 ESBT must also be completed and attached if applicable.
What you'll need
Have these forms and details available, as applicable:
- Federal Form 1041 and its schedules, including Schedules A and B, for income, deductions, and distributable net income.
- Schedule CT-1041B, for the Connecticut fiduciary adjustment, beneficiary shares, and beneficiary percentages.
- Trust or estate information, including its name, address, and federal employer identification number (FEIN).
- Beneficiary information, including names, addresses, Social Security numbers or FEINs, and Connecticut residency status.
- Schedule CT-PE, if allocating a PE tax credit. Attach a copy to Form CT-1041.
- The federal ESBT Tax Worksheet and Schedule CT-1041 ESBT, if applicable. Attach these to the return.
- Federal Schedule K-1 and Schedule CT K-1, if received from a partnership, S corporation, trust, or estate.
- Business or farm books and records, if needed to determine Connecticut-source income, and federal Form 4797 for applicable ordinary gains or losses.
A part-year resident inter vivos trust with one or more nonresident, noncontingent beneficiaries should also create a worksheet identifying the non-Connecticut-source income in Part 3, Column B, earned during the residency portion of the year.
How to file
Complete the schedule in the order that applies to the trust or estate:
- Resident trust or estate with nonresident beneficiaries: Complete Part 3, then Part 2.
- Resident trust or estate with only resident beneficiaries: Complete Part 2, Column 4, if applicable.
- Nonresident trust or estate, or part-year resident trust: Complete Part 3, then Part 2, then Part 1.
The instructions say not to complete Part 2 if Part 3, Line 24, Column B, is zero.
Attach Schedule CT-1041FA to the back of Form CT-1041, Connecticut Income Tax Return for Trusts and Estates. If completing Part 1, enter the allocated Connecticut tax from Line 12 on Form CT-1041, Line 3.
The schedule can be filed electronically. The form directs filers to myconneCT. No mailing address is provided in the supplied text.
Common mistakes
- Not checking federal line references. Verify the federal Form 1041 line references when completing this schedule.
- Leaving out Schedule CT-PE. If claiming the PE tax credit, attach a copy to Form CT-1041 or the credit will be disallowed.
- Allocating the PE tax credit based on distributable net income. The instructions specifically say the credit allocation is not based on those shares.
- Listing beneficiaries in a different order. Use the same order in Part 2 as on Schedule CT-1041B, Part 1.
- Completing Part 1, Lines 5 through 8, when they do not apply. These lines are only for part-year resident inter vivos trusts with one or more nonresident, noncontingent beneficiaries.
- Forgetting beneficiary statements. The form says the fiduciary must provide each beneficiary with Schedule CT-1041 K-1.
Questions people ask
What does Part 2 allocate?
Part 2 allocates federal distributable net income from Connecticut sources among the trust or estate and its beneficiaries in proportion to their shares of federal distributable net income. Column 4 separately reports allocated PE tax credits.
Are resident beneficiaries taxed only on their Connecticut-source share?
No. Their entire distributable share of trust or estate income, not just the Connecticut-source portion, is included in their Connecticut adjusted gross income.
What goes in Part 3, Column B, for a part-year resident trust?
Include all income during the residency portion of the tax year, Connecticut-source income during the nonresidency portion, and all items of special accruals.
How is the tax calculated in Part 1?
Line 10 multiplies Line 9 by 6.99%. If Line 9 is zero or less, enter zero. Line 12 then multiplies Line 10 by the allocation decimal on Line 11. Carry the Line 12 result to Form CT-1041, Line 3.