What is a Fiduciary?
Executors of estates or administrators of trusts are considered fiduciaries because they hold money or other assets on behalf of a beneficiary. The Internal Revenue Service requires these fiduciaries to file Form 1041. Form 1041 is an income tax return, the same as an individual or business would file but for a decedent's estate or a trust. The return reports income, capital gains, deductions, and losses, but subject to somewhat different rules than those that apply to living individuals. Form 1041 is filed regardless of whether there is a tax liability. Certain estates and trusts may be exempt from this filing requirement if their taxable income falls below a specified limit.
New for 2018
Beginning with tax year 2018, Michigan Fiduciary returns are eligible for e-file. However, the Michigan Department of Treasury (Treasury) is not able to accept e-payments for this tax year. Please check this site often for updates as they become available.
To ensure accurate processing of returns, each Michigan Fiduciary Income Tax e-file Payment Voucher (MI-1041-V) payment must be accompanied by one check for each return. Treasury is unable to process MI-1041-V payments that are designated for multiple returns and are paid with a single check.
Choose e-file Instead of Paper Returns. E-filing your return is easy, fast, and secure. When e-filing federal and Michigan returns together, much of the same data is used, so information is entered only once, lessening the possibility of error. Tax preparers who complete eleven (11) or more fiduciary tax returns are required to e-file all eligible returns. Visit www.MIfastfile.org for more information on e-file services. When e-filing, do not mail a paper copy of your return.
Excess Business Loss Limitation. Estates or trusts with a federal excess business loss limitation must complete Michigan Excess Business Loss (Form MI-461). Refer to instructions on Form MI-461 for further information on adjustments to Michigan income. For more information see the 2019 MI-1041 Booklet.
Who Must File
You must file a Michigan Fiduciary Income Tax Return (Form MI-1041) and pay the tax due if you are the fiduciary for an estate or trust that was required to file a U.S. Form 1041 or 990-T or that had income taxable to Michigan that was not taxable on the U.S. Form 1041. If no tax is due, you must file an informational MI-1041.
The only exceptions are:
- Tax-exempt trusts unless the trust has unrelated business income (UBI) attributable to Michigan.
Note: Estates or trusts with a charitable purpose or charitable beneficiaries should contact the Michigan Department of Attorney General, Charitable Trust Section at 517-373-1152 regarding filing requirements.
- Common trust funds. The trustee must notify each beneficiary of their portion of Michigan income from the fund and of the gains and/or losses available to each under Section 271 of the Michigan Income Tax Act.
- Nonresident estates or trusts with income from Michigan sources less than the federal exemption deduction. The deductions are $600 for estates, $300 for trusts currently distributing income, and $100 for all other trusts. See Fiduciary Nonresident Schedule (MI-1041 Schedule NR) instructions for more information.
- A grantor trust. When the grantor, or another person, is treated as the owner of the trust’s assets (Internal Revenue Code (IRC) sections 671 through 678), do not file an MI‑1041. Instead, the owner must report the trust’s income, deductions, and credits on the owner’s Michigan Individual Income Tax Return (Form MI-1040).
- Michigan cannot impose an income tax on income accumulated by a trust that became irrevocable by the death of the settlor (while a Michigan resident) when all of the following conditions are met:
- The trustee is not a Michigan resident.
- The assets of the trust are neither held, located, nor administered in Michigan.
- The beneficiaries are all nonresidents.
When to File
Fiduciary returns are due on or before April 15 or on the 15th day of the fourth month after the close of the tax year. If a refund is due, a return must be filed within four years of the due date to obtain the refund. Keep a copy of the return and all supporting schedules for six years.
Where to Mail the Return
Mail returns without payments to:
Michigan Department of Treasury
P O Box 30058
Lansing MI 48909
Mail returns with payments to:
Michigan Department of Treasury
P O Box 78000
Detroit MI 48278-1041
To ensure accurate processing of the return, send one check for each return. Make the check payable to “State of Michigan.” Enter the FEIN of the estate or trust and “2019 MI-1041” on the front of the check.
Note: E-filed returns with a tax due should mail the payment with the MI-1041-V as described above.
If you have questions, need forms mailed or need printed material in an alternate format, you may contact a customer service representative to assist you at 517-636-4486.
Assistance is also available using TTY through the Michigan Relay Service by calling 711.