Does a Trust Need Its Own Tax ID Number?

The short answer: it depends on who the tax law says owns the trust. A revocable living trust is treated as owned by the person who created it, so it can use that person’s Social Security number and needs no return of its own. An irrevocable trust that is not treated as owned by anyone is a separate taxpayer, must have its own employer identification number, and files its own return. Between those two are the irrevocable trusts that the tax law still treats as the grantor’s, such as most Medicaid asset protection trusts, which may use either approach. And every trust that survives its creator’s death needs a new number the day after the death, because the person whose number it was using is gone.

This article explains the federal rules that decide the question, what happens at death, how to get a number, and what New Jersey, New York, and Connecticut ask of trusts in addition.

FREE WEBINAR

5 Things to Know About

Estate Planning

When You Turn Sixty-Five

Save the Date

Friday, Oct 9^th at 2:30pm

Who Does the Tax Law Say Owns the Trust?

Sections 671 through 679 of the Internal Revenue Code, the grantor trust rules, decide whether a trust is ignored for income tax purposes or taxed on its own. If the person who created the trust kept certain powers or benefits, the trust’s income, deductions, and credits are reported by that person as if the trust did not exist. Three provisions do most of the work.

Under Section 676(a), “the grantor shall be treated as the owner of any portion of a trust” where “the power to revest in the grantor title to such portion is exercisable by the grantor or a non-adverse party.” That is every revocable living trust: the power to revoke makes the grantor the owner. Under Section 677(a), the grantor is the owner of any portion whose income “is, or, in the discretion of the grantor or a nonadverse party, or both, may be” either “distributed to the grantor or the grantor’s spouse” or “held or accumulated for future distribution to the grantor or the grantor’s spouse.” That catches many irrevocable trusts, including the income-only Medicaid trusts in which a parent gives up principal but keeps the income. Under Section 674(a), the grantor is the owner where “the beneficial enjoyment of the corpus or the income therefrom is subject to a power of disposition, exercisable by the grantor or a nonadverse party,” which is why a retained power to change beneficiaries also produces grantor trust status.

A trust that is not a grantor trust, because the grantor kept none of these powers or has died, is a taxpayer in its own right. It reports its income on Form 1041, pays tax on what it keeps, and passes out to beneficiaries the tax on what it distributes.

Does a Revocable Trust Need an EIN?

Usually not while the grantor is alive. Treasury Regulation 301.6109-1(a)(2)(i)(B) provides that “a trust that is treated as owned by one grantor or one other person under sections 671 through 678 need not obtain a taxpayer identification number, provided the trust reports pursuant to § 1.671-4(b)(2)(i)(A).” That cross-reference is to the first of two optional reporting methods for trusts “all of which is treated as owned by one or more grantors.” Under Regulation 1.671-4(b)(2)(i)(A), the trustee simply furnishes “the name and taxpayer identification number (TIN) of the grantor or other person treated as the owner of the trust, and the address of the trust, to all payors during the taxable year,” and under (b)(2)(ii)(B) “the trustee is not required to file any type of return with the Internal Revenue Service.” The bank reports the interest under the grantor’s Social Security number, the grantor reports it on Form 1040, and the trust is invisible. The Form 1041 instructions say the same thing in plainer words: “Grantor trusts that haven’t applied for an EIN and are going to file under Optional Method 1 don’t need an EIN for the trust as long as they continue to report under that method.”

The second optional method, under Regulation 1.671-4(b)(2)(i)(B), lets the trustee give payors the trust’s own name and EIN and then file Forms 1099 showing the trust as payor and the grantor as payee. It exists for trustees who prefer a separate number, and it costs a set of information returns each year. The default method under Regulation 1.671-4(a) is a Form 1041 with the income shown “on a separate statement to be attached to that form” rather than on the return itself. A trust with two or more grantors, such as a joint revocable trust of spouses who file separately, must use the trust’s own number under (b)(3), though under (b)(8) a trust owned by spouses filing jointly “is considered to be owned by one grantor.” The optional methods are unavailable to a few trusts listed in (b)(6), including one “that has its situs or any of its assets located outside the United States” and a qualified subchapter S trust.

For most families, then, the revocable trust uses the grantor’s Social Security number and nothing is filed for it. That is why the trust is transparent for income tax purposes and why it provides no income tax benefit.

Does an Irrevocable Trust Need an EIN?

If it is not a grantor trust, yes. Regulation 301.6109-1(a)(1)(ii)(C) requires trusts, like corporations and estates, to use an employer identification number whenever they must furnish a taxpayer identifying number, and a trust that files Form 1041 in its own name must have one. The Form 1041 instructions require a domestic trust to file if it has “any taxable income for the tax year,” “gross income of $600 or more (regardless of taxable income),” or “a beneficiary who is a nonresident alien.” The return is due “on or before the 15th day of the 4th month following the close of the tax year,” April 15 for a calendar-year trust, with a six-month extension available on Form 7004.

Two features of trust taxation make the separate return expensive. First, the exemption is small: under Section 642(b)(2), a trust deducts 100 dollars, or 300 dollars if it “is required to distribute all of its income currently,” and a qualified disability trust for a disabled beneficiary deducts the personal exemption amount, which Revenue Procedure 2025-32 sets at 5,300 dollars for 2026. Second, the brackets are compressed. For 2026 the same revenue procedure taxes a trust’s retained income at 10 percent up to 3,300 dollars, 24 percent to 11,700 dollars, 35 percent to 16,000 dollars, and 37 percent on everything above 16,000 dollars, and Section 1411 adds the 3.8 percent net investment income tax on undistributed investment income above “the dollar amount at which the highest tax bracket in section 1(e) begins,” the same 16,000 dollars. An individual does not reach the 37 percent bracket until several hundred thousand dollars of income. A trust reaches it at 16,000. Trustees of non-grantor trusts therefore often distribute income to beneficiaries, who pay at their own rates, rather than accumulate it.

If the irrevocable trust is a grantor trust, because the grantor kept an income interest under Section 677 or a power to change beneficiaries under Section 674, the analysis is the same as for a revocable trust. The trust may use the grantor’s Social Security number under the first optional method, or the trustee may obtain an EIN and use the second. Many trustees of Medicaid asset protection trusts obtain an EIN anyway, because financial institutions are more comfortable opening an account for an irrevocable trust in its own name and because a number will be needed at the grantor’s death in any event. Either way the income is taxed to the grantor during life, which is by design: the grantor’s payment of the tax is a further tax-free transfer to the beneficiaries.

What Happens When the Grantor Dies?

The trust stops being the grantor’s the moment the grantor dies, and it needs its own number. Regulation 301.6109-1(a)(3)(i)(A) provides that a trust “all of which is treated as owned by a decedent” must “obtain a new taxpayer identification number following the death of the decedent if the trust will continue after the death of the decedent,” and Regulation 1.671-4(h)(2) says the same. The Internal Revenue Service’s page on when a new EIN is required lists the events for trusts: “Get a new EIN if you: Are the grantor of many trusts. Generally, you will need an EIN for each trust. Change to an estate. The new EIN will be for the estate. Change a living or inter vivos trust to a testamentary trust. Terminate a living trust by distributing its property to a residual trust. Have a revocable trust that changes to an irrevocable trust.” The same page adds that “you don’t need a new EIN if you: Change the trustee. Change the grantor or beneficiary name or address.”

The successor trustee’s first tasks are therefore to obtain an EIN for the now-irrevocable trust, to give the new number to every bank and brokerage holding trust assets so that income after the date of death is reported to the trust rather than to the decedent, and to decide whether to make the Section 645 election. Under Section 645(a), if the executor and the trustee of a “qualified revocable trust” both elect, the trust “shall be treated and taxed as part of such estate (and not as a separate trust) for all taxable years of the estate ending after the date of the decedent’s death and before the applicable date,” which under Section 645(b)(2) is two years after death if no federal estate tax return is required, or six months after the estate tax liability is finally determined if one is. The election, made on Form 8855, lets the trust use the estate’s fiscal year and other estate-only rules, but it does not avoid the new number: the Form 8855 instructions state that “the trustee of a QRT must obtain a new employer identification number (EIN) for the QRT upon the death of the decedent,” and the Form 1041 instructions confirm that “all QRTs must obtain a new TIN following the death of the decedent whether or not a section 645 election is made.”

The same logic applies to trusts created under a will. A testamentary trust comes into existence at death, has never had a living grantor to borrow a number from, and needs its own EIN before it can receive the first dollar from the estate.

How Do You Get an EIN for a Trust?

Online, in minutes, for nothing. The IRS says so directly: “Use this tool to get an EIN directly from the IRS in minutes for free,” and “beware of websites that charge for an EIN. You never have to pay a fee for an EIN.” The application, Form SS-4 or its online equivalent, asks for a “responsible party,” which for a trust the instructions define as “a grantor, owner, or trustor,” not the trustee, and for a decedent’s estate as “the executor, administrator, personal representative, or other fiduciary.” The IRS limits issuance to one EIN per responsible party per day, and for trusts “the limitation is applied to the grantor, owner, or trustor,” so a family funding several trusts for several children on the same day should plan accordingly. The trustee will need the trust’s legal name as it appears in the instrument, the date the trust was created or, for a trust that became irrevocable at death, the date of death, and the grantor’s Social Security number.

What Do New Jersey, New York, and Connecticut Require?

Each state has its own fiduciary return, and each ties it to the federal rules in a slightly different way.

New Jersey. The Division of Taxation’s instructions for Form NJ-1041 require the fiduciary of “every resident estate or trust” to file “if gross income, before exemptions or deductions, was more than $10,000.” New Jersey does not exempt grantor trusts from that requirement. The instructions state that “grantor trusts are required to file a New Jersey Gross Income Tax Fiduciary Return,” and that “if the grantor trust income is reportable by or taxable to the grantor for federal income tax purposes, it also is taxable to the grantor for New Jersey Income Tax purposes.” The trust files, and the income flows to the grantor’s own New Jersey return. A resident trust with no New Jersey assets, no New Jersey income, and no New Jersey trustee is not taxed, but must still file with a statement certifying that it is not subject to tax.

New York. The instructions for Form IT-205 require a return when the trust “is required to file a federal income tax return for the tax year” or “had any New York taxable income for the tax year,” and for grantor trusts direct the trustee to “use the same filing method you used for federal purposes.” A grantor trust that “did not have to file federal Form 1041 because it chose an optional filing method” does not file IT-205; one that files a federal 1041 with a grantor statement files IT-205 with the same information. New York’s residency rule is unusual: a trust is a resident trust if it “consists of property of a person domiciled in New York State when such property was transferred to the trust,” regardless of where the trustee lives, but under Tax Law 605(b)(3)(D) a resident trust escapes New York tax if “all the trustees are domiciled in a state other than New York,” “the entire corpus of the trusts, including real and tangible property, is located outside the state of New York,” and “all income and gains of the trust are derived from or connected with sources outside of the state of New York.” Because intangible property is treated as located in New York if any trustee is domiciled there, the choice of trustee decides the result.

Connecticut. The Department of Revenue Services requires Form CT-1041 from a resident trust that “is required to file a federal Form 1041 for the taxable year” or “had any Connecticut taxable income for the taxable year,” and follows the federal treatment of grantor trusts exactly: “A grantor trust not required to file federal Form 1041 should not file Form CT-1041. A grantor trust required to file federal Form 1041 must file Form CT-1041 in the same manner.” Connecticut taxes trust income at a flat 6.99 percent, and its instructions warn that the Department “does not process income tax returns for trusts and estates without an FEIN. You cannot write ‘applied for’ in the FEIN field.” A Connecticut trust that will file must have its number before the return is due. Under General Statutes 12-701(a)(4), a trust is a Connecticut resident trust if it holds property of a person who was a Connecticut resident when the property was transferred to an irrevocable trust, or when a revocable trust was funded if it has since become irrevocable.

What Should a Trustee Take From This?

Three rules of thumb. While the grantor of a revocable trust is alive, do nothing: the trust runs on the grantor’s Social Security number and the grantor’s Form 1040. When an irrevocable trust is created, ask the attorney who drafted it whether it is a grantor trust and how it will report, and get an EIN if the trust will hold accounts in its own name or will not be wholly owned by one grantor. When a grantor dies, obtain a new EIN for every trust that continues, give the number to every institution, consider the Section 645 election with the executor, and calendar the first Form 1041 and the matching state return. Our articles on how much a trustee is paid and how co-trustees act cover the rest of the trustee’s job, and our article on cost basis and the step-up at death explains the other tax event that occurs on the same day the number changes.

Plan Well. Live Better.

A tax identification number is a small thing that signals a large one: whether the trust is yours for tax purposes or its own. At Milvidskiy Law Group, we draft trusts with the reporting method decided in advance, guide trustees through the first year after a death, and coordinate with the family’s accountant so the federal and state returns match. Learn more about our estate planning services.

This article is for general informational purposes only and does not constitute legal or tax advice. Reading it does not create an attorney-client relationship. Trust taxation depends on the terms of the instrument and the residence of the grantor, trustees, and beneficiaries, and the figures change annually. The Internal Revenue Code sections, Treasury Regulations, IRS forms and instructions for tax year 2025, Revenue Procedure 2025-32 figures for 2026, and the New Jersey, New York, and Connecticut instructions and statutes described were verified in September 2026 and should be confirmed with a tax advisor before relying on them.