Form 1041-ES: Estimated Tax for Estates and Trusts, Due Dates, and Penalties

Form 1041-ES is how a fiduciary pays estimated income tax for an estate or non-grantor trust, and the IRS requires those quarterly payments whenever the entity expects to owe $1,000 or more in federal tax for the year after withholding and credits.¹ Miss an installment or underpay one and the penalty runs at 7% annually, compounded daily, from the day the payment was due.²

Who Has to Pay

The $1,000 threshold counts regular income tax, the alternative minimum tax, and the 3.8% net investment income tax together.¹ If the combined expected liability after withholding and credits reaches that figure, the fiduciary is on the hook for quarterly payments.

Two situations create a full exemption no matter how large the expected tax bill. A decedent’s estate owes no estimated tax for any year ending within two years of the date of death. The same two-year window covers a trust that was fully owned by the decedent during life (a grantor trust) and that receives the residue of the estate.³ The clock runs from the date of death, not the date the estate opens in probate.

One boundary worth stating plainly: a grantor trust owned by a living person does not file Form 1041 at all. The grantor reports trust income on their personal return and uses Form 1040-ES for any estimated payments. Form 1041-ES is only for non-grantor trusts and estates that owe tax at the entity level.

Calculating What to Pay

The Form 1041-ES package includes a worksheet, but the arithmetic follows four steps: project gross income, subtract deductions, apply the tax rates, and reduce by credits.

Starting With Retained Income

Only income the entity keeps gets taxed at the entity level. Begin with projected gross income for the year, then reduce it by the income distribution deduction for amounts paid or required to be distributed to beneficiaries. That deduction is capped at the entity’s distributable net income, a defined figure that keeps items like capital gains allocated to corpus inside the trust.⁴

Then subtract the exemption: $600 for an estate, $300 for a simple trust required to distribute all income currently, $100 for a complex trust. What remains is estimated taxable income.

Applying the Brackets

Trust and estate rates compress fast. For 2026:¹

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

The top rate hits at $16,000 of retained taxable income. For an individual, that same 37% rate does not begin until taxable income passes roughly $609,000. The 3.8% net investment income tax applies to the lesser of undistributed net investment income or AGI over $16,000, so a trust with meaningful retained investment income can face a combined 40.8% at the top.

Subtract any available credits (foreign tax credits and business credits passed through from underlying investments are the common ones). What is left is the year’s total estimated tax, which you divide into four installments.

When Income Comes in Unevenly

If most of the entity’s income arrives late in the year, equal quarterly payments force an overpayment early on. The annualized income installment method lets each quarter’s payment reflect income actually earned through that period. Payments will not be equal. A fiduciary who uses this method files Form 2210 with the final Form 1041 to show the IRS how each installment was computed.⁵

When Payments Are Due

For a calendar-year trust or estate, the 2026 installments are due:

1st installment: April 15, 2026
2nd installment: June 15, 2026
3rd installment: September 15, 2026
4th installment: January 15, 2027

The spacing is uneven. Only two months separate the first and second payments, which catches some fiduciaries off guard after a long gap from the prior January. A due date that lands on a weekend or legal holiday pushes to the next business day.¹ A fiduciary who prefers to pay the full year upfront can do that with the April installment.

Fiscal-year entities follow the same rhythm from the 15th day of the 4th, 6th, and 9th months of the fiscal year, with the final installment due the 15th of the 1st month after year-end.

How to Pay

EFTPS is the IRS’s preferred channel for trusts and estates. Enrollment is not instant: after you submit the entity’s information, the IRS mails a PIN to the address of record in five to seven business days.⁶ A newly opened estate needs to start that process well before the first installment is due. Once enrolled, the timing rule that trips people up is this one: payments must be scheduled by 8:00 p.m. ET at least one calendar day before the due date, not on the due date itself.⁷ Submitting on the due date counts as late.

IRS Direct Pay accepts bank account debits without enrollment. Each payment must be under $10 million, and no more than five payments go through in any 24-hour window.⁸

Paper vouchers from the Form 1041-ES package still work. Mail the check or money order with the correct voucher, mark the entity’s EIN and the tax year on the payment, and allow for mail time: the postmark date is what counts.

Whatever method you use, hold onto the proof. EFTPS confirmation numbers, bank records, or canceled check images are what you need if the IRS later questions a payment. The burden of proving a payment was made sits with the fiduciary.

Avoiding the Underpayment Penalty

The penalty is calculated separately for each quarter, using the IRS interest rate (currently 7%, compounded daily) over the number of days the installment was short.² A missed first-quarter payment costs more than a missed fourth-quarter payment because the underpayment period is longer.

Safe Harbors

No penalty applies if the entity’s total estimated payments and withholding equal at least:

90% of the tax shown on the current year’s Form 1041, or
100% of the tax shown on the prior year’s Form 1041¹

The prior-year figure jumps to 110% if the entity’s AGI on the prior year’s return was above $150,000.¹ Because trust income reaches the top bracket at $16,000, trusts with meaningful retained earnings cross that $150,000 line easily. The prior-year safe harbor is attractive when current-year income is hard to project, since last year’s tax is a known number.

Waivers

The IRS waives all or part of the penalty in narrow circumstances. One is an underpayment caused by a casualty, disaster, or other unusual circumstance where imposing the penalty would be unfair. Another is reasonable cause tied to a fiduciary who retired after reaching age 62 or became disabled during the tax year.

For federally declared disaster areas, the IRS identifies affected taxpayers by location and applies relief automatically, without a Form 2210 request.⁹ Outside of automatic disaster relief, file Form 2210 with the return and check the waiver request box.

Pushing Payments to the Beneficiaries

A fiduciary can elect to credit some or all of the entity’s estimated payments to the beneficiaries instead of applying them against the entity’s own liability. This fits when the trust or estate distributes most of its income and the beneficiaries will owe the individual tax. The election is made on Form 1041-T, due by the 65th day after the close of the entity’s tax year.¹⁰ Amounts allocated this way are treated as estimated tax payments made by the beneficiaries on the last day of the entity’s tax year. It is a useful lever when distribution patterns shift late in the year and the entity ends up overpaid against its final retained income.

1
Internal Revenue Service. Form 1041-ES – Estimated Income Tax for Estates and Trusts
2
Internal Revenue Service. Interest Rates Remain the Same for the First Quarter of 2026
3
Office of the Law Revision Counsel. 26 USC 6654 – Failure by Individual to Pay Estimated Income Tax
4
Office of the Law Revision Counsel. 26 USC 643 – Definitions Applicable to Subparts A, B, C, and D
5
Internal Revenue Service. IRS Form 2210 – Underpayment of Estimated Tax by Individuals, Estates, and Trusts
6
Electronic Federal Tax Payment System. Electronic Federal Tax Payment System
7
Internal Revenue Service. Electronic Federal Tax Payment System: A Guide to Getting Started
8
Internal Revenue Service. Direct Pay With Bank Account
9
Internal Revenue Service. Instructions for Form 2210
10
Internal Revenue Service. Instructions for Form 1041 and Schedules A, B, G, J, and K-1 (2025)