Hawaii — Do I Need to File a Federal Estate/Income Tax Return for an Estate with No Distributions? | Hawaii Probate | FastCounsel
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Hawaii — Do I Need to File a Federal Estate/Income Tax Return for an Estate with No Distributions?

August 19, 2025 6 min read

When must a personal representative file a federal tax return for an estate if no distributions were made?

Short answer: Even if the estate made no distributions, you may still need to file a federal estate income tax return (Form 1041) or other federal tax forms. Filing depends on whether the estate earned taxable income during administration, whether certain beneficiaries are nonresident aliens, and whether the gross estate meets the federal estate tax filing threshold. Under Hawaii probate law the personal representative is responsible for handling these tax matters while the estate is open.

Detailed answer — federal filing tests and steps

1) Final individual income tax return for the decedent (Form 1040)

The decedent’s final individual federal income tax return (Form 1040) must be filed for the year of death if the decedent otherwise would have been required to file a return. This is separate from any estate return. The personal representative usually prepares and files the decedent’s final Form 1040 (reporting income up to date of death) and any required state return. See the IRS guidance on filing a deceased person’s final return: https://www.irs.gov/individuals/final-filing-information-for-the-person-who-dies.

2) Federal estate income tax return (Form 1041) — when it’s required

Form 1041 (U.S. Income Tax Return for Estates and Trusts) is required if either of the following apply:

  • The estate has gross income of $600 or more for the tax year; or
  • Any beneficiary of the estate is a nonresident alien.

Gross income includes interest, dividends, rental income, taxable gains from sale of estate assets, and other taxable receipts the estate receives after death. Even if the estate makes no distributions to beneficiaries, income earned by estate assets while they are held by the estate can create a filing obligation if it meets the $600 threshold. See the IRS form and instructions: https://www.irs.gov/forms-pubs/about-form-1041 and https://www.irs.gov/instructions/i1041.

3) Federal estate tax return (Form 706) — when it’s required

Form 706 (United States Estate (and Generation-Skipping Transfer) Tax Return) is required if the decedent’s gross estate plus certain taxable gifts and specific deductions exceed the federal filing threshold for the year of death. If the gross estate is below that threshold, no federal estate tax return is required. The threshold is set by federal law and can change annually; check the IRS for the current amount and Form 706 guidance: https://www.irs.gov/forms-pubs/about-form-706.

4) Employer Identification Number (EIN) and Form 56

If the estate needs to file Form 1041 or otherwise conduct its own tax reporting, the personal representative should obtain an EIN for the estate (you generally cannot use the decedent’s SSN for estate tax filings). Apply online: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online. It is also common to file Form 56 to notify the IRS that you are the estate’s fiduciary: https://www.irs.gov/forms-pubs/about-form-56.

5) Timing and final estate tax return

Form 1041 is generally due on the 15th day of the fourth month after the end of the estate’s tax year (most estates use a calendar year). Estates may elect a fiscal year under certain rules. If an estate never meets the filing threshold and has no income, you typically do not file Form 1041; however, you still must file the decedent’s final Form 1040 (if required) and keep records. When an estate’s administration is complete and assets are distributed, the estate’s final Form 1041 should be marked “final return.” Instructions with deadlines are on the IRS site: https://www.irs.gov/forms-pubs/about-form-1041.

How Hawaii law fits in

Under Hawaii probate law, the personal representative (executor or administrator) has the duty to gather assets, pay debts and taxes, and distribute the estate according to the will or intestacy rules. See Hawaii’s probate statutes for the personal representative’s duties: https://www.capitol.hawaii.gov/hrscurrent/Vol10_Ch0501-0588/HRS0560/.

Additionally, Hawaii requires the filing of any applicable Hawaii state income or fiduciary returns for estates that earn income while under administration. Check Hawaii Department of Taxation guidance and forms for fiduciary returns and state filing thresholds: https://tax.hawaii.gov/forms/.

Practical examples (hypothetical facts)

Example A — No income, no distributions

The estate holds only one bank account and one house that produces no rental income. The bank paid no interest and the estate realized no taxable gains. No beneficiaries received distributions while the estate was open. Gross income for the estate year is $0. In this situation the estate generally would not have to file Form 1041. The personal representative still should file the decedent’s final Form 1040 (if required) and keep documentation showing the estate had no income.

Example B — No distributions, but estate receives income

The estate holds dividend-paying stocks and a savings account that accrued $1,200 interest while the estate was being administered. No distributions were made to beneficiaries. Because the estate’s gross income exceeds $600, the estate must file Form 1041 and report the income, even though the estate didn’t distribute funds to beneficiaries.

Example C — Nonresident alien beneficiary

Even if the estate’s gross income is under $600, if any beneficiary is a nonresident alien, Form 1041 must be filed. This rule exists regardless of distributions.

What you should do next (step-by-step)

  1. Inventory the estate’s post-death receipts for the tax year: interest, dividends, rent, capital gains, debt cancellations, and other income.
  2. Decide whether the estate will have gross income of $600 or more, or whether any beneficiary is a nonresident alien.
  3. If filing is needed, get an EIN for the estate and prepare Form 1041. If you expect an estate tax return liability or would be close to the threshold, review Form 706 requirements.
  4. File the decedent’s final Form 1040 if applicable.
  5. Keep careful records and consult a tax professional or attorney if the estate has complex assets (business interests, foreign assets, significant capital gains, or potential federal estate tax issues).

Helpful Hints

  • Do not assume “no distributions” means “no filings.” Filing obligations are based on income and other tests, not solely on distributions.
  • Obtain an EIN early if you expect any estate-level reporting.
  • Keep bank and brokerage statements showing whether accounts paid interest or dividends after death.
  • File the decedent’s final Form 1040 even when the estate files Form 1041; they are separate returns covering different periods and taxpayers.
  • If you’re close to filing thresholds or there are foreign beneficiaries or assets, consult a tax advisor with estate experience—federal rules can be complex.
  • Document why you did not file (if you choose not to). Keep a short memo with calculations showing gross income under $600 or why no Form 706 was required.

Key resources

Disclaimer: This article is educational and informational only. It is not legal or tax advice. Laws and filing thresholds change. For advice tailored to your estate’s facts, consult a licensed tax professional or an attorney familiar with Hawaii probate and federal tax rules.

The information on this site is for general informational purposes only, may be outdated, and is not legal advice; do not rely on it without consulting your own attorney.