About preparing estimates and remitting estimated tax payments
Estimated taxes for trusts filing Form 1041 and for private foundations filing Form 990-PF are due four times a year on income that is not subject to withholding taxes. 1041 federal estimated tax payments can be remitted using the Electronic Federal Tax Payment System (EFTPS), or a paper check and printed tax voucher can be mailed to the applicable IRS office listed in the Form 1041-ES Instructions. An account's 1041 federal estimated tax payment must be paid by voucher if the IRS rejects the payment after validating the account's information.
ONESOURCE Trust Tax supports 990-PF federal estimates for fiscal year and calendar year private foundations. 990-PF federal estimate amounts can be calculated using the prior year alternative or the annualized alternative methods. Only the 990-W Standard Option annualization period is used for the annualized alternative method. Estimated tax calculations and payments for Form 990-T are not available in ONESOURCE Trust Tax.
Private foundations are required to make estimated tax payments electronically (using EFTPS). Generally, payments are due on the fifteenth day of the fifth, sixth, ninth and twelfth months. If a payment due date falls on a Saturday, Sunday or a legal holiday, it is not due until the next day that is not a Saturday, Sunday or other legal holiday. See the current year Form 990-W Instructions for specific due dates for calendar year private foundations. ONESOURCE Trust Tax allows multiple payment requests for the same due date.
EFTPS
EFTPS is a service offered by the U.S. Department of the Treasury. It allows you to submit electronic estimated tax payments for multiple accounts. EFTPS uses the Automated Clearing House (ACH) method for making payments. The ACH method requires you to have a checking, savings or DDA account where funds can be redirected for the purpose of remitting estimated tax payments. The ACH debit information you enter in ONESOURCE Trust Tax is passed through the Treasury Financial Agent (TFA), allowing the ACH to take money from the appropriate financial institution and distribute it to the U.S. Department of the Treasury.
State estimates and estimated tax payments
ONESOURCE Trust Tax supports state estimates for the states listed in the table below. The table also includes the estimate filing and payment details.
State | Filing Method | Payment Details |
|---|---|---|
Arkansas | Printed voucher | You are responsible for mailing voucher and paper check to the state taxing authority. |
California | ONESOURCE Trust Tax transmits estimate data to the state taxing authority OR Printed voucher | You are responsible for mailing paper check to the state taxing authority. |
Connecticut | Printed voucher | You are responsible for mailing voucher and paper check to the state taxing authority. |
Delaware | Printed voucher | You are responsible for mailing voucher and paper check to the state taxing authority. |
Georgia | Printed voucher | You are responsible for mailing voucher and paper check to the state taxing authority. |
Hawaii | Printed voucher | You are responsible for mailing voucher and paper check to the state taxing authority. |
Kentucky | Printed voucher | You are responsible for mailing voucher and paper check to the state taxing authority. |
Maine | Printed voucher | You are responsible for mailing voucher and paper check to the state taxing authority. |
Maryland | Disk AND Printed voucher | You are responsible for saving estimate data to a disk and mailing it along with a paper check to the state taxing authority. See Form 504D in the State Summary Report file for instructions. |
Massachusetts | Website upload OR Printed voucher | ACH debit. |
Michigan | ONESOURCE Trust Tax transmits estimate data to the state taxing authority OR Printed voucher | Michigan state doesn't accept fiduciary estimated payments electronically. You are responsible for mailing paper check with the MI-1041-ES to the state taxing authority. |
Minnesota | Website upload OR Printed voucher | ACH debit. For printed vouchers, you are responsible for mailing the voucher and a paper check to the state taxing authority. |
New Jersey | Printed voucher | You are responsible for mailing voucher and paper check to the state taxing authority. |
New Mexico | Printed voucher | You are responsible for mailing voucher and paper check to the state taxing authority. |
New York | ONESOURCE Trust Tax transmits estimate data to the state taxing authority | ACH debit. You must obtain a four-digit fiduciary ID from the New York State Department of Taxation and Finance (NYSDTF) before you can electronically file New York estimated tax payments. |
North Dakota | Printed voucher | You are responsible for mailing voucher and paper check to the state taxing authority. |
Ohio | Printed voucher OR Website | For printed vouchers, you are responsible for mailing a check and Ohio IT 1041-ES to the state taxing authority. Otherwise, file estimates through the www.tos.ohio.gov website for each trust. |
Oklahoma | Printed voucher | You are responsible for mailing voucher and paper check to the state taxing authority. |
Pennsylvania | Automatic electronic transmission when ONESOURCE Trust Tax is used to file estimates OR Printed voucher | ACH credit. |
Rhode Island | Printed voucher | You are responsible for mailing voucher and paper check to the state taxing authority. |
South Carolina | Printed voucher | You are responsible for mailing voucher and paper check to the state taxing authority. |
Vermont | Printed voucher | You are responsible for mailing voucher and paper check to the state taxing authority. |
Virginia | Printed voucher | You are responsible for mailing voucher and paper check to the state taxing authority. |
Wisconsin | ONESOURCE Trust Tax transmits estimate data to the state taxing authority OR Printed voucher | ACH debit. For printed vouchers, you are responsible for mailing voucher and paper check to the state taxing authority. |
Federal and state estimate calculations
ONESOURCE Trust Tax uses the prior year alternative and annualized alternative methods to calculate federal and resident state estimates. Only the prior year alternative is used to calculate nonresident state estimates. The prior year alternative calculation is based on the last tax return processed in ONESOURCE Trust Tax for the prior year return. Depending on AGI, the prior year tax percentage is either 100% or 110%. An option on the Estimate Control page can be set so that the prior year alternative is paid 100% in one quarter if the total estimate amount is below a specific dollar amount. Overpayments and estimates paid in previous quarters reduce the total estimate amount. If an account's prior year tax return was not computed using ONESOURCE Trust Tax, then the prior year alternative estimate fields are blank.
The annualized alternative calculation is based on the transactions and sales loaded to your ONESOURCE Trust Tax database for the time period required for a particular quarter. The following table shows the quarter, periods and the tax effective date ranges for the transactions and sales that fall into each period:
Quarter | Period | Tax Effective Date Range |
|---|---|---|
1 | January through February | Financial information between 01/01/YYYY and 02/28/YYYY |
2 | January through April | Financial information between 01/01/YYYY and 4/30/YYYY |
3 | January through July | Financial information between 01/01/YYYY and 7/31/YYYY |
4 | January through November | Financial information between 01/01/YYYY and 11/30/YYYY |
When calculating the annualized alternative, ONESOURCE Trust Tax starts with year-to-date (up to the ending date listed in the table above for the quarter) capital sales and income (for 990-PF estimates, this includes the investment income used in processing a 990-PF tax return projection). Expenses are deducted then income is annualized. The exemption is deducted and the tax is computed. The applicable percentage for the given quarter is applied, which calculates the estimate owed for the quarter. Overpayments and estimates paid in previous quarters are deducted to arrive at the total estimate amount.
The annualized alternative is not automatically calculated when:
- The estimate control option to suppress the annualized alternative calculation is set.
- The prior year alternative is below the dollar amount entered for theConsider the annualized alternative when the prior year alternative is aboveestimate control option.
The annualized alternative calculation excludes the following:
- Quick Entry amounts
- Charitable deduction transactions, including entries made on the Charitable Deduction-1041 page
- Tax credits
- Dollar amounts entered for long and short-term principal beneficiary distributions
- Special allocations
- Certain options that affect tax computations (such as total return trust logic and net investment income)
- Section 199A computations
- Form 4797 gains and losses
- State computations relating to amounts from tax codes 67, 68, 69, 105, 116 and 118 (fees subject to the 2% floor limitation)
- Partnership K-1 amounts other than lines 1 through 9b
- S-Corp K-1 amounts other than lines 1 through 8b, 9 and 10a
- Trust/Estate K-1 amounts other than lines 1 through 4b, 5, 6, 7 and 8
Capital loss carryovers from the previous year are prorated by quarter. For example, a $10,000 capital loss carryover in Quarter 3 is calculated as:
7 months/12 months x $10,000 = $5,833
Capital losses are prorated by quarter because the maximum allowed for the year is $3,000. For example, the maximum amount of capital loss allowed for Quarter 3 is calculated as:
7 months/12 months x $3,000 = $1,750
SuperBank capabilities
If you have multiple PANs, you can group them together into a SuperBank association for the purpose of preparing and filing estimates. This allows you to:
- Submit one EFTPS enrollment request for all of the PANs in the SuperBank association. All of the accounts in the SuperBank association that are marked asInclude in next EFTPS enrollmentare included in the EFTPS enrollment request.
- Submit one estimate back-end file request, one estimate payment voucher request or one estimate filing request for all of the PANs in the SuperBank association.
The estimate SuperBank association is automatically applied to all of the estimate registers in ONESOURCE Trust Tax. For estimate registers, you cannot modify the register properties under the
Superbank
collapsible section on the Register Properties page for the SuperBank association. You cannot view the estimate information for a PAN that you have not been given access to.Contact your Client Manager if you currently do not use this feature but want to.