WI - Pass-through entity withholding by estates and grantor trusts discussed

The Wisconsin Department of Revenue has issued a personal income tax notice regarding pass-through entity withholding requirements for estates and grantor trusts. According to the notice, estates and trusts are generally required to make estimated income tax payments. However, under one limited exception, estates and grantor trusts that are funded on account of a decedent's death are only required to make estimated tax payments for any taxable year ending two or more years after the decedent's death.

The department will follow the same limited exception with respect to quarterly withholding payments by estates and trusts that are treated as pass-through entities for federal tax purposes. Estates and grantor trusts that are treated as pass-through entities for federal tax purposes will now be required to make estimated withholding payments for any taxable year ending two or more years after the decedent's death. For example, if an individual dies on June 10, 2007, a grantor trust that is funded on account of the individual's death is not required to make estimated tax payments for any taxable year ending before June 10, 2009.

The full text of the notice is available at http://www.dor.state.wi.us/taxpro/news/100218.html. News for Tax Practitioners, Wisconsin Department of Revenue, February 18, 2010