Would the refund of state income taxes be issue back to the beneficiary?
Question Details:
How would a refund for state income taxes be redistributed? This is the first time that my trust yearly income was subjected to state income taxes. Would that money be part of income paid to beneficiary or return back into the trust?
Wills, Trusts, Probate Law Answers
That would depend what taxes were being refunded.
If the refund was of tax that was due from the trust, then the money would simply go back into the trust. If the refund was of taxes on your individual income, then the refund is your money.
It's a fairly simple principle, really. The refund belongs to whoever originally owed the tax. And if it was tax on your personal income, it doesn't matter if the trust wrote the check.
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