Generally, an estate or trust must pay estimated income tax for 2013 if it expects to owe, after subtracting any withholding and credits, at least $1,000 in tax, and it expects the withholding and credits to be less than the smaller of:
90% of the tax shown on the 2013 tax return, or
100% of the tax shown on the 2012 tax return (110% of that amount if the estate's or trust's adjusted gross income on that return is more than $150,000, and less than 2/3 of gross income for 2012 or 2013 is from farming or fishing).
However, if a return was not filed for 2012 or that return did not cover a full 12 months, item 2 does not apply.
For this purpose, include household employment taxes in the tax shown on the tax return, but only if either of the following is true:
The estate or trust will have federal income tax withheld for 2013 (see the instructions for line 24e), or
The estate or trust would be required to make estimated tax payments for 2013 even if it did not include household employment taxes when figuring estimated tax.
Estimated tax payments are not required from:
An estate of a domestic decedent or a domestic trust that had no tax liability for the full 12-month 2012 tax year;
A decedent's estate for any tax year ending before the date that is 2 years after the decedent's death; or
A trust that was treated as owned by the decedent if the trust will receive the residue of the decedent's estate under the will (or if no will is admitted to probate, the trust primarily responsible for paying debts, taxes, and expenses of administration) for any tax year ending before the date that is 2 years after the decedent's death.
For more information, see Form 1041-ES, Estimated Income Tax for Estates and Trusts.
A financial institution that has been designated as an authorized federal tax depository, and acts as a fiduciary for at least 200 taxable trusts that are required to pay estimated tax, is required to deposit the estimated tax payments electronically using the Electronic Federal Tax Payment System (EFTPS).
A fiduciary that is not required to make electronic deposits of estimated tax on behalf of a trust or an estate may voluntarily participate in EFTPS. To enroll in or get more information about EFTPS, visit the EFTPS website at www.eftps.gov or call 1-800-555-4477. Also, see Pub. 966, Electronic Federal Tax Payment System: A Guide to Getting Started.
Fiduciaries of trusts that pay estimated tax may elect under section 643(g) to have any portion of their estimated tax payments allocated to any of the beneficiaries.
The fiduciary of a decedent's estate may make a section 643(g) election only for the final year of the estate.
You make the election by filing Form 1041-T, Allocation of Estimated Tax Payments to Beneficiaries, by the 65th day after the close of the estate's or trust's tax year. Then, you include that amount on the Schedule K-1 (Form 1041) for the beneficiary(ies) for whom you elected it.
Failure to make a timely election will result in the estimated tax payments not being transferred to the beneficiary(ies) even if you entered the amount you wanted transferred on Schedule K-1.
See the instructions for line 24b for more details.