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What is the purpose of Schedule K-1-T?
Similar to the federal Schedule K-1, the purpose of Schedule K-1-T, Beneficiary's Share of Income and Deductions, is for the trust or estate to supply each individual or entity who was a beneficiary at any time during the tax year with that individual’s or entity’s share of the amounts reported on the trust’s or estate’s federal income tax return and Illinois business income tax return.
For Illinois income tax purposes, the completed Schedule K-1-T and a copy of the Schedule K-1-T(2), Beneficiary's Instructions, must be given to each beneficiary if any part of the income is paid, credited, distributed, or deemed to have been paid, credited, or distributed by the trust or estate to the beneficiary. This must be done by the extended due date of Form IL-1041, Fiduciary Income and Replacement Tax Return. If you are the trust or estate that completes Schedule K-1-T, do not include copies of any Schedule(s) K-1-T you issued to your beneficiaries when you submit your fiduciary return to the Illinois Department of Revenue. The beneficiaries will report this information when they file their Illinois income tax returns.
If you receive a Schedule K-1-T from a trust or estate, then you must attach a copy of the Schedule K-1-T you received to your Illinois income tax return to report and claim any amounts you received. Please keep a copy of the Schedule K-1-T you received for your files.