N-40 Sch. K1: Beneficiary’s Share of Income, Deductions, Credits, etc. (2025)
Hawaii · Hawaii DoTax · Used for tax years 2025
Hawaii Schedule K-1 (Form N-40) reports a beneficiary’s share of income, deductions, credits, and other tax items from a trust or decedent’s estate. It includes instructions for reporting these amounts on Forms N-11 and N-15.
Who files this form
A separate Schedule K-1 (Form N-40) must be completed for each beneficiary of a trust or decedent’s estate.
The schedule reports the beneficiary’s share of income, deductions, credits, and other items. It includes instructions for beneficiaries filing Hawaii Form N-11 or Form N-15.
What you'll need
Depending on the items reported on your Schedule K-1, you may need:
- Your federal Schedule K-1 (Form 1041) and the Form N-11 instructions if you file Form N-11 and your federal and Hawaii K-1 amounts differ.
- The Form N-15 instructions, which contain the referenced worksheets for Form N-15 filers.
- Form N-312, N-586, or N-346 to calculate the credits listed on lines 7a, 7b, or 7c, respectively.
- A copy of this Schedule K-1 to attach to your Hawaii return if you claim the estimated tax credit on line 9a.
- Schedule NT and Form N-4T for the nonresident beneficiary withholding reported on line 9c. Individual taxpayers must attach Form N-4T to their return.
The form also calls for a separate sheet listing net income taxes paid to another state or foreign country on line 6.
How to file
Use column (c) and the beneficiary instructions to report Schedule K-1 amounts on the appropriate Hawaii return lines, worksheets, or credit forms.
- If you file Form N-11 and your federal and Hawaii K-1 amounts differ, make the necessary adjustments on the Hawaii Additions Worksheet and/or Hawaii Subtractions Worksheet in the Form N-11 instructions.
- If you claim the line 9a estimated tax credit, attach a copy of Schedule K-1 to your Hawaii income tax return.
- For line 9c withholding, individual taxpayers report the amount on Form N-15, line 54, and attach Form N-4T.
The supplied text does not give a mailing address or e-filing directions.
Common mistakes
- Changing an incorrect K-1 yourself. Notify the fiduciary and request a corrected Schedule K-1. Do not change items on your copy. Make sure the estate or trust sends the corrected copy to the Hawaii Department of Taxation.
- Overlooking federal and Hawaii differences. Form N-11 filers must make the necessary worksheet adjustments when the federal and Hawaii K-1 amounts differ.
- Ignoring passive activity limits. The instructions caution that passive activity loss limitations under IRC section 469 apply to estates and trusts.
Questions people ask
What does the “Final K-1” box mean for deductions?
If the fiduciary checked this box, you may be allowed to deduct excess deductions from the final year and certain unused carryovers on your individual income tax return, subject to limitations.
How do I treat the estimated tax amount on line 9a?
For tax year 2025, treat it as an estimated tax payment made on January 20, 2026, when computing any underpayment and penalty on Form N-210. Attach a copy of Schedule K-1 to your Hawaii return to support the credit. This is a payment-treatment date, not a filing deadline.
What do lines 10 through 13 report for nonresident beneficiaries?
They report interest, dividends, other intangible income, and capital gains or losses from sales of intangibles that are not subject to Hawaii tax. The stated exclusion does not apply to income from real property held in a land trust formed under Chapter 558, HRS.
Where are credits not listed on lines 7a through 7c reported?
Report other credits you are claiming on line 9d.