Delaware: Do I Need to File Federal Estate or Income Tax Returns When No Distributions Were Made? | Delaware Probate | FastCounsel
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Delaware: Do I Need to File Federal Estate or Income Tax Returns When No Distributions Were Made?

August 19, 2025 5 min read

When must an estate file federal tax returns if no distributions were made?

Disclaimer: This is general information, not legal or tax advice. Consult a licensed attorney or tax professional for advice tailored to your situation.

Detailed Answer

Two different federal filings often arise after a death: the decedent’s final individual income tax return (Form 1040), and federal filings for the estate (most commonly Form 1041 for income tax and Form 706 for the federal estate tax). Whether you must file depends on what income or reportable items exist, not solely on whether you have made distributions to beneficiaries.

1) Decedent’s final individual income tax return (Form 1040)

The person responsible for the estate (personal representative or executor) must file the deceased person’s final Form 1040 for the year of death if the decedent would otherwise have had to file. This return covers income earned through the date of death. It is separate from any estate return and must be filed by the usual due date for that tax year. For details, see the IRS guidance on filing a deceased person’s return: https://www.irs.gov/individuals/filing-a-deceased-persons-tax-return.

2) Estate income tax return (Form 1041)

Form 1041 (U.S. Income Tax Return for Estates and Trusts) is required when an estate has:

  • Gross income of $600 or more for the tax year, or
  • A beneficiary who is a nonresident alien.

“Gross income” here means income the estate receives after the date of death — interest, dividends, rents, business income, and similar items. The requirement to file Form 1041 depends on that income amount, not on whether the personal representative distributed funds to beneficiaries. If the estate earns less than $600 in gross income during the tax year and has no nonresident alien beneficiary, you generally do not need to file Form 1041. See IRS Form 1041 information and instructions: https://www.irs.gov/forms-pubs/about-form-1041.

3) Federal estate tax return (Form 706)

Form 706 (United States Estate (and Generation-Skipping Transfer) Tax Return) reports the decedent’s gross estate and is required only when the gross estate (plus certain adjusted taxable gifts and prior taxable amounts) exceeds the federal estate tax filing threshold for the year of death. The filing threshold changes over time. Whether distributions were made from estate accounts does not change whether the gross estate meets the threshold. For current rules and the filing threshold, see the IRS estate tax page: https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax and the Form 706 page: https://www.irs.gov/forms-pubs/about-form-706.

4) Employer Identification Number (EIN) for the estate

If the estate must file Form 1041 or otherwise conduct financial activity that requires separate reporting, the estate will usually need an EIN. Apply online through the IRS: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online.

5) How “no distributions” affects filing

Not making distributions to beneficiaries does not eliminate filing duties. Filing obligations hinge on:

  • Whether the decedent’s final Form 1040 is required;
  • Whether the estate received $600 or more of gross income after death (Form 1041 threshold); and
  • Whether the gross estate exceeds the federal estate tax filing threshold (Form 706).

6) Practical examples

Example A — Small bank account, no distributions: The estate receives $40 in bank interest after death and no other income. That is below the $600 threshold, so Form 1041 usually is not required. The decedent’s final Form 1040 may still be needed for income through date of death.

Example B — Brokerage account with dividends after death, no distributions: If the estate receives $1,200 in dividends after death, the estate’s gross income exceeds $600 and you must file Form 1041 even if you did not distribute any funds to beneficiaries.

Example C — Large estate, no distributions: If the decedent’s gross estate (assets at death plus certain gifts) exceeds the federal filing threshold for that year, you must file Form 706 even if you have not distributed anything to heirs.

7) Delaware considerations

Federal filing obligations are determined by federal law and the IRS rules described above. Delaware law sets who acts as the personal representative and defines certain state probate procedures. For state-level tax questions, or to confirm whether Delaware imposes any state estate taxes or administrative forms for estates, consult the Delaware Division of Revenue: https://revenue.delaware.gov. If the estate holds assets governed by Delaware probate law, consider local counsel to ensure compliance with Delaware probate timelines and duties.

Helpful Hints

  • Gather statements: Collect bank, brokerage, rental, and business records from the date of death forward. Income after death can trigger Form 1041.
  • File the decedent’s final Form 1040 if required. That return is separate from any estate return.
  • Check the $600 gross income rule for Form 1041. Even small passive income can push the estate past the threshold.
  • Determine whether any beneficiaries are nonresident aliens — that alone triggers Form 1041 filing requirements.
  • Consider whether Form 706 is required by checking the federal estate tax filing threshold for the year of death on the IRS site: https://www.irs.gov/forms-pubs/about-form-706.
  • Obtain an EIN for the estate early if you expect to file Form 1041 or otherwise manage estate income: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online.
  • Keep good records of any distributions and trustee/executor actions, even if you initially make no distributions. These records help prepare accurate returns later.
  • When in doubt, consult a Delaware probate attorney or a tax professional. Federal and state rules can interact in ways that affect filing choices and timing.
  • Use IRS Publication 559 for a plain-language overview: https://www.irs.gov/publications/p559.

If you would like, provide basic facts about the estate’s assets (types of accounts, income after death, whether beneficiaries live outside the U.S., and an estimate of total gross estate). With that information a tax professional or attorney can give more specific guidance.

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.