Instructions for Form TC-41 "Utah Fiduciary Income Tax Return" - Utah

This document contains official instructions for Form TC-41, Utah Fiduciary Income Tax Return - a form released and collected by the Utah State Tax Commission.

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Download Instructions for Form TC-41 "Utah Fiduciary Income Tax Return" - Utah

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Utah 2019
Fiduciary Income Tax
Try filing online!
tap.utah.gov
Utah State Tax Commission
Utah State Tax Commission
210 North 1950 West • Salt Lake City, Utah 84134
210 North 1950 West • Salt Lake City, Utah 84134
tax.utah.gov
tax.utah.gov
Utah 2019
Fiduciary Income Tax
Try filing online!
tap.utah.gov
Utah State Tax Commission
Utah State Tax Commission
210 North 1950 West • Salt Lake City, Utah 84134
210 North 1950 West • Salt Lake City, Utah 84134
tax.utah.gov
tax.utah.gov
Contents
General Instructions ...................................................................................................................................................................................1
TC-41 - Line-by-Line Instructions ...............................................................................................................................................................5
TC-41A – Fiduciary Supplemental Schedule ...........................................................................................................................................11
TC-41B - Non or Part-year Resident Estate or Trust ................................................................................................................................19
TC-41C – Bankruptcy Estate Schedule ....................................................................................................................................................20
TC-41K – Benefi ciaries’ Share of Income, Deductions and Credits .........................................................................................................23
TC-41K-1 – Benefi ciary’s Share of Utah Income, Deductions, and Credits .............................................................................................24
TC-41N – Pass-through Entity Withholding Tax ........................................................................................................................................26
TC-41W – Utah Withholding Tax Schedule...............................................................................................................................................28
TC-250 – Credits Received from Upper-tier Pass-through Entities and Mineral Production Withholding Tax Credit on TC-675R ...........30
Qualifi ed Funeral Trust Information ...........................................................................................................................................................31
Cover photo: Guardsman Pass, Big Cottonwood Canyon, UT, by Mike Holt
E-Filing is Easier!
Need more information?
E-fi ling is the easiest and most accurate way to fi le. Ask your tax
Questions
801-297-2200 or
preparer about e-fi ling your individual, fi duciary, partnership, C cor-
1-800-662-4335 (outside the Salt Lake area)
poration and S corporation returns, or use commercial tax software.
Research
Utah rules, bulletins and Commission decisions:
tax.utah.gov
Utah is Online
Utah Code (UC): le.utah.gov
Utah offers many online services for individual and business fi lers,
Internal Revenue Code (IRC):
including:
law.cornell.edu/uscode/26
tap.utah.gov
Order paper forms
• Pay by e-check or credit card.
801-297-6700 or
• Manage your Utah tax account.
1-800-662-4335, ext. 6700 (outside the SL area)
• Request payment plans.
tax.utah.gov
Utah Taxpayer Advocate Service
• Download forms and instructions for all Utah tax types.
The Taxpayer Advocate Service helps taxpayers who have made
• Link to free business resources and other services.
multiple, unsuccessful attempts to resolve concerns with the Tax
Commission. This service helps resolve problems when normal
agency processes break down, identifi es why problems occurred, and
References
suggests solutions. See tax.utah.gov/contact, or contact us to fi nd
UC
Utah Code (le.utah.gov)
out if you qualify for this service at 801-297-7562 or 1-800-662-4335,
IRC Internal Revenue Code (law.cornell.edu/uscode/26)
ext. 7562, or by email at taxpayeradvocate@utah.gov.
Do not use the Taxpayer Advocate Service to bypass normal methods
for resolving issues or disputes.
E-Verify for Employers
Employers can help prevent identity theft by verifying the Social Se-
If you need an accommodation under the Americans with Disabili-
curity numbers of job applicants. E-Verify is a free service of the U.S.
Department of Homeland Security that verifi es employment eligibility
ties Act, email taxada@utah.gov, or call 801-297-3811 or TDD
through the Internet. Employers can use E-Verify at e-verify.gov.
801-297-2020. Please allow three working days for a response.
1
2019 Utah TC-41 Instructions
General Instructions
we will assess penalties if you have not met the prepayment
What's New
requirements (see below).
Solar Energy Systems Phase-out:
The maximum
See instructions for line 39. All extension calendar year returns
Renewable Residential Energy Systems Credit (credit 21)
must be fi led by Oct. 15, 2020.
for solar power systems installed in 2019 is $1,600.
FDIC Premium Deduction:
The 2019 legislature passed
Prepayment Requirements for Filing
SB 12, creating a subtraction from income for FDIC pre-
miums that were not allowed on the federal return. See
Extension
page 13.
You must prepay by the original due date:
Residency and Domicile:
Rules and defi nitions have
90 percent of your 2019 tax due (TC-41, line 38);
changed. See page 2.
100 percent of your 2018 tax liability (2018 TC-41, line 38);
or
Who Must File
90 percent of your 2019 tax due (TC-41, line 38) if you
If you are a fi duciary of an estate or trust with income derived
did not have a tax liability in 2018 or this is your fi rst year
from Utah sources, and you are required to fi le a federal Fi-
fi ling.
duciary Income Tax Return, then you must fi le form TC-41,
The pass-through withholding tax must be paid to the Tax
Utah Fiduciary Income Tax Return.
Commission by the original due date of the return, without
regard to extensions. You may pay at tap.utah.gov or use
When to File and Pay
form TC-549, Fiduciary Income Tax Return Payment Coupon.
You must fi le your return and pay any tax due:
You may prepay through withholding (W-2, TC-675R, etc.),
payments applied from a previous year refund, tax credits and
1. By April 15, 2020, if you fi le on a 2019 calendar year basis
credit carryovers, or payment made by the tax due date using
(tax year ends Dec. 31, 2019); or
form TC-548, Fiduciary Income Tax Prepayment Coupon or at
2. By the 15th day of the fourth month after the fi scal year
tap.utah.gov. Interest is assessed on unpaid tax from the fi ling
ends, if you fi le on a fi scal year basis. If the due date falls
due date until the tax is paid in full. Penalties may also apply.
on Saturday, Sunday or legal holiday, the due date is the
next business day.
Where to File
All Utah income taxes for the year must be paid by the due
date. If your return is not fi led on time or all income tax due
Mail your return to:
is not paid by the due date you may be subject to penalties
Utah State Tax Commission
and interest. (See instructions for line 39.)
210 N 1950 W
SLC, UT 84134-0250.
Utah does not require quarterly estimated tax payments. You
can prepay at any time by sending your payment with form
TC-548, Fiduciary Income Tax Prepayment Coupon, or by
What to Attach and What to Keep
paying at tap.utah.gov.
Attach
Tax Period and Accounting Method
Utah Schedules:
Attach all applicable schedules (TC-41A,
TC-41B, TC-41C, TC-41K, TC-41K-1 for each benefi ciary,
The fi rst return fi led by an administrator or executor of an estate
TC-41N, TC-41S, TC-41W, and TC-250).
must cover the period from the date of the decedent’s death
to the end of the fi rst tax year selected by the administrator
Other Adjustments:
Attach an explanation for any eq-
or executor. The fi rst return fi led by a fi duciary of a trust must
uitable or fi duciary adjustment entered on TC-41A, Part
cover the period beginning with the creation of the trust to
2, code 79 or code 87.
the end of the fi rst tax year selected by the fi duciary. Returns
Other Utah Forms:
Attach a copy of Utah TC-40LIS if you
must be fi led for each subsequent year the estate or trust ex-
are a building project owner of a low-income housing unit.
ists. The taxable year cannot be longer than 12 months and
Tax Due:
If you have an amount due on the return, sub-
must coincide with the tax year selected for fi ling the federal
mit form TC-549, Fiduciary Income Tax Return Payment
return. You must apply the same accounting method used for
Coupon (see the last page of this book), and your check
federal fi duciary income tax purposes as for Utah fi duciary
or money order with the return.
income tax purposes.
Extension of Time to File
FYI: Withholding Forms
Withholding tax information must be entered on
This is NOT an extension of time to pay your
TC-41W, which is attached to your return.
taxes – it is an extension to fi le your return.
You get an automatic extension of up to six months to fi le
your return. You do not need to fi le an extension form, but
2
2019 Utah TC-41 Instructions
Keep
1. claims a residential exemption for a primary residence
under UC §59-2, Property Tax Act;
Do not send forms W-2, 1099-R, 1099-MISC, Utah Schedule
2. voted in Utah during the taxable year and were not regis-
K-1 received from an upper-tier pass-through entity (see TC-
tered to vote in another state during that time; or
250 instructions in this book for the defi nition of upper-tier
3. fi le a Utah income tax return as a full-year or part-year
pass-through entity), etc., or form TC-675R (showing mineral
withholding tax) with your return. If you do not complete and
resident.
send form TC-41W with your return, processing will be delayed
Test 3
and we may reject your withholding credit.
Even if you do not meet any of the conditions above, you are
Do not send a copy of your federal return, credit schedules
still domiciled in Utah if:
(other than Utah Schedules TC-41A, TC-41S, and/or TC-41W),
worksheets, or other documentation with your Utah return.
1. either you or your spouse has a permanent home in Utah
to which either of you intend to return after being absent;
Recordkeeping
and
2. you or your spouse has voluntarily settled in Utah, not
Keep copies of any receipts, state forms, worksheets, credit
for a special or temporary purpose, but with the intent of
authorization forms, and other documentation to support any
making a permanent home.
income, deduction, exemption, and credit you have reported.
You may be asked to provide this information later to verify
Under Test 3, whether you have a permanent home in Utah
entries on your Utah return.
is based on a preponderance of the evidence (i.e., the evi-
dence you have a permanent home is more convincing than
Rounding Off to Whole Dollars
any evidence you do not), taking into consideration all of the
following facts and circumstances:
Round off cents to the nearest whole dollar. Round down if
You or your spouse has a Utah driver’s license.
under 50 cents; round up if 50 cents and above. Do not enter
You or your spouse claims a federal tax credit (IRC §24)
cents on the return.
for a dependent who is enrolled as a resident student in a
Utah state institution of higher education.
Fiduciary and Estate Defi ned
The nature and quality of the living accommodations you
Fiduciary means a guardian, trustee, executor, administrator,
or your spouse has in Utah compared to another state.
receiver, conservator, or any person acting in a fi duciary capac-
You have a spouse or dependent in Utah for whom you or
ity for any individual or entity. The term estate refers only to
your spouse claims a federal tax credit under IRC §24.
the estate of a deceased person and does not include a trust
The physical location where you or your spouse earns
maintained for minors, for a person adjudicated incompetent,
income.
or for any person who is suffering from another legal disability.
The state of registration of a vehicle owned or leased by
Note: Throughout these instructions, any reference to “you”
you or your spouse.
means the fi duciary of the estate or trust.
You or your spouse has a membership in a church, club
or similar organization in Utah.
"Domicile" Defi ned
You or your spouse lists a Utah address on mail, a telephone
(UC §59-10-136)
listing, a listing in an offi cial government publication, other
A benefi ciary’s domicile determines whether an estate or
correspondence, or similar item.
trust must withhold Utah income tax for that benefi ciary. See
You or your spouse lists a Utah address on a federal or
Pass-through Entity Withholding Requirements on page 4.
state tax return.
Utah Domicile
You or your spouse claims Utah residency on a document
(other than a Utah income tax return) fi led with or provided
(UC §59-10-136)
to a court or other government entity.
Test 1
You or your spouse fails to obtain a permit or license nor-
mally required of a resident in the state where you claim
You are domiciled in Utah if:
to have domicile.
1. You or your spouse claimed a child tax credit (IRC §24) for
You are the noncustodial parent of a dependent enrolled
a dependent on your federal tax return, and the dependent
in a Utah public K-12 school for which you claimed a child
is enrolled in a Utah public K-12 school. This does not ap-
tax credit (IRC §24) on your federal tax return, and you
ply if you are the dependent’s noncustodial parent and are
are divorced from the custodial parent.
divorced from the custodial parent.
You maintain a place of abode in Utah and spent 183 or
2. You or your spouse is enrolled as a resident student in a
more days of the taxable year in Utah.
Utah state institution of higher education.
You or your spouse did not vote in Utah during the taxable
Test 2
year but voted in Utah in any of the three prior years and
There is a rebuttable presumption you are domiciled in Utah
was not registered to vote in another state during those
(i.e., you are domiciled in Utah unless you can prove otherwise)
three years.
if you or your spouse:
3
2019 Utah TC-41 Instructions
No Utah Domicile
a. the trust does not specify a place of administration
and the fi duciary transacts a major portion of its trust
You do not have a Utah domicile if you are absent from Utah
administration in Utah,
for at least 761 consecutive days and during this time you or
b. the fi duciary’s usual place of business is in Utah, or
your spouse:
c. the trust states that Utah is the place of administration,
1. do not return to Utah for more than 30 days in a calendar
and any administration of the trust is done in this state.
year,
2. do not claim a child tax credit under IRC §24 on your federal
Nonresident Estate or Trust Defi ned
tax return for a dependent who is enrolled in a Utah public
K-12 school (unless you are a noncustodial parent of the
The terms nonresident estate or nonresident trust are defi ned
dependent and are divorced from the custodial parent),
as estates or trusts that are not resident estates or trusts.
3. are not enrolled in a Utah state institution of higher educa-
tion as a resident student,
Part-year Resident Estate or Trust
4. do not claim the residential exemption for property tax on
Defi ned
your primary residence in Utah, or
A part-year resident estate or trust is a resident estate or
5. do not claim Utah as your tax home for federal tax purposes.
trust for part of the year and a nonresident estate or trust for
An absence from the state begins on the later of the date you
part of the year. All income received during the period of Utah
or your spouse leaves Utah and ends on the day you or your
residency is taxable in Utah, regardless of where that income
spouse returns to and stays in Utah for more than 30 days in
is earned, unless specifi cally exempted. Income from Utah
a calendar year.
sources is taxable in Utah during the period of nonresidency.
If you do not have Utah domicile, you may choose to have Utah
domicile by fi ling a Utah resident income tax return.
Exempt Trusts
Spouses
Trust income that is exempt from federal income tax is also
exempt from Utah income tax.
If your spouse has Utah domicile under Test 1 (above), you
An exempt trust with unrelated business income in Utah that
also have Utah domicile. If your spouse has Utah domicile
fi les federal Form 990-T must fi le Utah form TC-20MC, Tax
under Tests 2 or 3, you also have Utah domicile unless you
Return for Miscellaneous Corporations.
can establish by a preponderance of the evidence (i.e., the
evidence for your claim is more convincing than any evidence
against it) that during the taxable year and the three prior
Amounts Reportable as Utah
years you did not:
Income by the Benefi ciaries
1. own property in Utah,
Utah resident benefi ciaries must report the income from the
2. spend more than 30 days in a calendar year in Utah,
estate or trust included in the benefi ciary’s federal adjusted
3. receive earned income for services performed in Utah,
gross income to Utah as though the benefi ciary received the
4. vote in Utah, or
income directly. The estate or trust residence does not affect
the source of income for computing the benefi ciary’s Utah
5. have a Utah driver’s license.
individual income tax.
You are not considered to have a spouse with Utah domicile if:
A Utah nonresident benefi ciary is not required to fi le a Utah
1. you and the spouse are legally separated or divorced, or
return if:
2. you and the spouse both claimed married fi ling separately
1. their only Utah source of income is from a partnership, S
on your federal individual income tax returns for the taxable
corporation, estate or trust (or other pass-through entity);
year.
and
You must fi le a Utah income tax return (or amended return)
2. suffi cient Utah income tax was withheld by the partnership,
and pay any penalty and interest that apply if you did not fi le
S corporation, estate or trust (or other pass-through entity)
a Utah return based upon your belief that you did not meet
to cover the Utah tax liability on the Utah source income.
the domicile criteria.
Portfolio Income
Resident Estate or Trust Defi ned
Portfolio income listed on federal return schedules may be
Resident estate or resident trust means:
either business or nonbusiness income.
1. an estate of a deceased person who, at death, was domi-
Nonbusiness portfolio income is treated as nonbusiness
ciled in Utah;
income on the Utah return and is attributable to the state of
2. a trust, or a portion of a trust, consisting of property trans-
residence of:
ferred by will of a deceased person who at death was
the estate or trust, if retained by the estate or trust, or
domiciled in Utah; or
the benefi ciary, if distributed to a benefi ciary.
3. a trust administered in Utah.
A trust is administered in Utah if: