Do Trusts Get 1099s? Grantor, Non-Grantor, and TIN Rules

Yes, trusts do get 1099s. Any bank, brokerage, or other payer that sends reportable income to a trust account files a Form 1099 against whatever taxpayer identification number is on file for that account. The practical question is whose number that is, and whose return the income ends up on. For a grantor trust, the 1099 income typically flows through to the grantor’s personal Form 1040. For a non-grantor trust, the trust itself is the taxpayer, files Form 1041, and faces income tax brackets that hit the top 37% rate at just $16,000 of retained taxable income in 2026.¹

Which TIN Goes on the Trust’s 1099s

A 1099 is tied to the taxpayer identification number on file with the payer.² For a trust account, that TIN is either the grantor’s Social Security Number or the trust’s own Employer Identification Number.³

The trustee controls this by giving each financial institution a Form W-9. On the W-9, the trustee checks the “Trust/estate” box and supplies either the grantor’s SSN or the trust’s EIN, then certifies that the number is correct and that the account is not subject to backup withholding.⁴ Which number belongs on that form is driven by whether the trust is a grantor or non-grantor trust.

Grantor Trusts: Income Reports Under the Grantor

A grantor trust is one where the person who created it keeps enough control or benefit that the IRS treats the trust as invisible for income tax purposes. Most revocable living trusts fall into this category while the grantor is alive. The income shown on any 1099s is taxed on the grantor’s personal Form 1040, and the trust itself owes nothing.

The IRS allows three ways to handle the paperwork, and the trustee picks one and stays with it for the year:⁵

Give every payer the grantor’s name and SSN. All 1099s come back in the grantor’s name, and no trust tax return is filed at all. This is Optional Method 1, the simplest approach, and it works for any trust with a single grantor.
File a Form 1041 showing only the entity information at the top, with no dollar amounts on the form itself. The trustee attaches a statement listing all income, deductions, and credits attributable to the grantor in the same detail they would appear on the personal return. This is the default method.
Use the trust’s EIN with payers, receive the 1099s in the trust’s name, and then reissue 1099s showing the grantor as the payee. This is Optional Method 2. It creates more paperwork but can help when multiple accounts make Method 1 impractical.

Whichever method the trustee uses, the tax outcome is the same: every dollar of trust income lands on the grantor’s personal return and is taxed at the grantor’s individual rates.

What Changes When the Grantor Dies

This is where successor trustees most often stumble. When the grantor of a revocable living trust dies, the trust typically becomes irrevocable by its own terms and can no longer use the deceased grantor’s SSN. The IRS now treats the trust as a separate taxpayer. The successor trustee must apply for a new EIN as soon as possible after the death, even if the trust already had a separate TIN during the grantor’s lifetime.

Once the new EIN is in place, the trustee needs to submit an updated Form W-9 to every bank, brokerage, and other payer that holds trust assets. From that point forward, 1099s will be issued in the trust’s name under its new EIN, and the trust will file its own Form 1041 each year. Any income earned between the date of death and the end of the tax year belongs to the trust as a non-grantor entity, not to the deceased grantor’s final personal return. Miss this transition and 1099s go out under a dead person’s SSN, which triggers IRS matching errors and can delay estate settlement.

Non-Grantor Trusts: The Trust Pays Its Own Tax

A non-grantor trust uses its own EIN on W-9s, receives 1099s in its own name, and files Form 1041 for any tax year in which it has gross income of $600 or more, or any taxable income at all.⁵ The trustee gathers every 1099 the trust received and reports total income on the return, broken out by type: interest, ordinary dividends, qualified dividends, capital gains, rents, and so on.

What makes non-grantor trusts punishing is how fast the tax rates climb on whatever income the trust keeps. The 2026 brackets for estates and non-grantor trusts are:¹

10% on taxable income up to $3,300
24% from $3,301 to $11,700
35% from $11,701 to $16,000
37% above $16,000

The 12%, 22%, and 32% brackets are skipped entirely. A trust hits the top 37% rate at $16,000 of retained income. A single individual doesn’t reach that rate until $640,600.⁶ On top of that regular tax, the Net Investment Income Tax adds a 3.8% surtax on undistributed investment income once the trust’s adjusted gross income passes the threshold where the top bracket begins, also $16,000 in 2026.⁷ A non-grantor trust holding more than $16,000 in investment income can face a combined marginal rate of 40.8%.

That is why experienced trustees distribute income to beneficiaries whenever the trust terms allow. Distributed income is taxed at the beneficiary’s rate, which is almost always lower, and distributing can also sidestep the NIIT.

How Distributions Push Income to Beneficiaries

After deductions for trustee fees, legal and accounting costs, and state income taxes attributable to trust operations, Form 1041 produces a figure called Distributable Net Income. DNI caps how much the trust can deduct for distributions to beneficiaries and caps how much of those distributions the beneficiaries must include in their own income.⁵ Whatever income remains after the distribution deduction is taxed to the trust at the compressed rates.

Each beneficiary receives a Schedule K-1 showing their share of the trust’s income, deductions, and credits.⁸ The K-1 preserves the character of the income. If the trust earned $5,000 in qualified dividends and $3,000 in ordinary interest, the beneficiary’s K-1 breaks those amounts out separately, so qualified dividends keep their lower capital-gains rate on the beneficiary’s return while interest is taxed as ordinary income. Interest from the K-1 goes on Schedule B, dividends go on Form 1040 lines 3a and 3b, and capital gains flow to Schedule D.⁹

The 65-Day Election

Trustees don’t always know in December exactly how much they need to distribute to manage the trust’s tax bill. The 65-day election lets the trustee treat distributions made within the first 65 days of the new year as if they were paid on the last day of the prior tax year. The election is made on Form 1041 and must be renewed annually.¹⁰ The amount eligible is capped at the trust’s income or DNI for the prior year, reduced by distributions already made during that year. For a calendar-year trust, the deadline to make these retroactive distributions falls around March 6.

Backup Withholding If the W-9 Is Wrong

If the trustee never submits a W-9, provides an incorrect TIN, or if the IRS has notified the payer that the trust previously underreported income, the payer must withhold 24% of every reportable payment and send it to the IRS.⁴ This applies to interest, dividends, rents, royalties, and most other 1099-reportable income.¹¹

Backup withholding is not a separate tax. It is credited against the trust’s liability when Form 1041 is filed, and any excess is refunded. But having 24% of every payment locked up at the IRS creates a cash flow problem that most trustees would rather avoid. Avoiding it means getting a properly completed W-9 to every financial institution, with the right TIN for the trust’s current status. If the trust has received an IRS notice about previous underreporting, the trustee must cross out the certification about backup withholding before signing.⁴

1
Internal Revenue Service. 2026 Form 1041-ES, Estimated Income Tax for Estates and Trusts
2
Internal Revenue Service. Information Return Reporting
3
Internal Revenue Service. Taxpayer Identification Numbers (TIN)
4
Internal Revenue Service. Form W-9 Request for Taxpayer Identification Number and Certification
5
Internal Revenue Service. Instructions for Form 1041 and Schedules A, B, G, J, and K-1
6
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
7
Office of the Law Revision Counsel. 26 U.S. Code 1411 – Imposition of Tax
8
Internal Revenue Service. Instructions for Form 1041 and Schedules A, B, G, J, and K-1 (2025)
9
Internal Revenue Service. Instructions for Schedule K-1 (Form 1041) for a Beneficiary Filing Form 1040 or 1040-SR (2025)
10
eCFR. 26 CFR 1.663(b)-1 – Distributions in First 65 Days of Taxable Year
11
Internal Revenue Service. Publication 15 (2026), (Circular E), Employer’s Tax Guide