Short Answer

Usually no. A federal estate income tax return (IRS Form 1041) is required if the estate had $600 or more in gross income during its tax year or if any beneficiary is a nonresident alien. If there were no distributions and the estate’s gross income stayed under $600, a Form 1041 is typically not required. If the estate makes any beneficiary distributions during the year, you should file to correctly report and issue Schedule K‑1s, even if income is under $600.

Understanding the Problem

You are the North Carolina personal representative and want to know whether you must file a federal income tax return for the estate when no money left estate accounts. This question focuses on whether filing is triggered by income, distributions, or both, and what that means for the estate’s federal and North Carolina filing duties.

Apply the Law

Under federal law, an estate is a separate taxpayer. It generally files IRS Form 1041 if it has at least $600 in gross income during its taxable year or has a nonresident alien beneficiary. Estates can choose a fiscal year and must file by the 15th day of the fourth month after the fiscal year ends. North Carolina’s fiduciary return (Form D-407) is generally required when a federal 1041 is required and the estate has North Carolina-source income or income for the benefit of a North Carolina resident.

Key Requirements

• Income threshold: File Form 1041 if the estate’s gross income is $600 or more for the tax year.
• Nonresident alien beneficiary: File Form 1041 even if income is under $600 when a beneficiary is a nonresident alien.
• Distributions: In any tax year the estate distributes to beneficiaries, file federal and state fiduciary returns to report distributable net income and issue Schedule K‑1s.
• Filing deadlines: The 1041 is due the 15th day of the fourth month after the estate’s fiscal year ends; extensions are available (IRS Form 7004; NC Form D‑410P).
• State return (D‑407): File when a federal 1041 is required and the estate has NC-source income or income for a NC resident beneficiary.

What the Statutes Say

• 26 C.F.R. § 1.6012-3 (When estates must file) — Requires a fiduciary return for estates with gross income of $600+ or a nonresident alien beneficiary.
• 26 C.F.R. § 1.6072-1 (Return due dates) — Estate 1041 due the 15th day of the fourth month after the fiscal year ends.
• N.C. Gen. Stat. § 105-160.2 (Tax on estates and trusts) — Imposes North Carolina income tax on estates and trusts.
• N.C. Gen. Stat. § 105-160.3 (Computation of tax) — Explains how North Carolina computes tax for estates and trusts.

Analysis

Apply the Rule to the Facts: If the estate earned little or no income and made no distributions, and total gross income stayed under $600, a federal 1041 is typically not required. If instead the estate had $700 of bank interest but made no distributions, the $600 income threshold would require filing a 1041. If the estate had $300 of income but made distributions to beneficiaries, file a 1041 to properly report distributable net income and issue Schedule K‑1s. If any beneficiary is a nonresident alien, file even when income is under $600.

Process & Timing

1. Who files: Personal representative. Where: IRS (Form 1041) and North Carolina Department of Revenue (Form D‑407, if required). What: IRS Form 1041 with Schedules K‑1 (as needed); NC Form D‑407. When: Due the 15th day of the fourth month after the estate’s fiscal year ends (for a calendar‑year estate, April 15). Use IRS Form 7004 and NC Form D‑410P to request extensions; pay any expected tax with the extension.
2. Obtain an EIN for the estate and place it on income‑producing assets so Forms 1099 report under the estate’s EIN. Choose a fiscal year that fits administration and tax planning.
3. If the estate remains open two or more years, evaluate federal estimated tax payments on Form 1041‑ES. File returns, issue any Schedules K‑1 to beneficiaries, and keep copies for the estate’s court accounting.

Exceptions & Pitfalls

• Nonresident alien beneficiary: triggers a federal filing even under $600 of income.
• Distributions without filing: distributing to beneficiaries usually requires a 1041 and K‑1s to correctly report income; skipping this can cause mismatched reporting.
• Wrong taxpayer ID: leaving 1099s under the decedent’s SSN instead of the estate’s EIN can cause IRS matching issues.
• Extensions do not extend payment: interest and penalties can accrue if you don’t pay with the extension.
• State filing follow‑on: if a federal 1041 is required and the estate has NC income or a NC resident beneficiary, an NC D‑407 is typically required.

Talk to a Probate Attorney

If you’re unsure whether your North Carolina estate needs a 1041 or D‑407, our firm can help you confirm thresholds, pick a fiscal year, and meet filing deadlines. Call us today at (919) 341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney–client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.