Detailed Answer — Federal and Illinois context

Short answer: Maybe — it depends on whether the estate earned income (interest, dividends, rents, capital gains, etc.), whether any beneficiary is a nonresident alien, and whether the estate meets federal filing thresholds. Simply making no distributions does not automatically eliminate federal filing obligations.

Key federal rules to know:

• Fiduciary income tax returns (IRS Form 1041) are required when an estate has gross income of $600 or more for the tax year, or when any beneficiary is a nonresident alien. See the IRS Form 1041 instructions for details: IRS Instructions for Form 1041.
• The estate’s gross income includes all income the estate receives during administration — e.g., bank interest, dividends, rents, business income, and gains from sale of assets — even if those amounts are retained in the estate rather than distributed to beneficiaries.
• Even if the estate has no income and therefore no Form 1041 obligation, you still must file the decedent’s final individual income tax return (Form 1040) covering the period from January 1 through the date of death if the decedent otherwise met filing requirements for that year. The personal representative often files that return and any required schedules; this is separate from Form 1041.
• If the gross value of the decedent’s estate exceeds the federal estate tax filing threshold, you may need to file Form 706 (the federal estate (and generation‑skipping transfer) tax return). The federal filing threshold and rules change over time; check current guidance before relying on a specific dollar amount: About Form 706.
• If you must file Form 1041, the estate generally needs its own Employer Identification Number (EIN). You can apply online: Apply for an EIN.

Practical examples

• Example 1 (no Form 1041 required): The estate only holds a checking account that produced no interest during administration and the estate had no other income. No beneficiary is a nonresident alien. In that case you typically will not need to file Form 1041 for the estate. You still must evaluate whether the decedent’s final individual return (Form 1040) is required.
• Example 2 (Form 1041 required despite no distributions): The estate holds brokerage accounts that generated $2,500 in dividends and $1,200 in interest in the administration year, and those amounts were retained in the estate (no distributions). Because gross income exceeded $600, the personal representative must file Form 1041 and report the estate income.
• Example 3 (Form 1041 required because of beneficiary residency): The estate had $100 of interest, but one beneficiary is a nonresident alien. Form 1041 is required in that situation even though gross income is under $600.

Timing and filing notes

• Form 1041 is due according to the estate’s tax year (a calendar-year estate generally follows the same deadlines as individuals). If you need extra time, the estate can request an extension (see the Form 1041 instructions for the correct extension procedure).
• If filing Form 1041, use the estate’s EIN rather than the decedent’s Social Security number.
• Even if you determine no federal Form 1041 is required, keep careful records (bank statements, investment statements, and receipts) that show the estate produced no reportable income in case the IRS questions the omission later.

Illinois-specific considerations

• Federal Form 1041 rules determine the need for a federal fiduciary return. Illinois may also have state-level filing requirements for estates and trusts (for example, an Illinois fiduciary income tax return) depending on the estate’s Illinois-source income or resident beneficiaries. For state tax guidance and forms, check the Illinois Department of Revenue website: Illinois Department of Revenue.
• Illinois also has its own estate tax regime (separate from federal estate tax) that can require filing and payment at the state level depending on the size of the estate. Because state thresholds and forms differ from federal rules, review Illinois resources or consult a professional if the estate has significant assets.

Helpful Hints

• Check whether the estate earned any income at all during administration (interest, dividends, rents, sale proceeds). Even small amounts can trigger a federal Form 1041 or a state fiduciary return.
• Identify each beneficiary’s residency status. A nonresident‑alien beneficiary can create a filing requirement for Form 1041 regardless of the $600 threshold.
• File the decedent’s final Form 1040 if required. That is separate from any estate Form 1041 obligation.
• If you must file Form 1041, obtain an EIN for the estate before filing and sign the return in the fiduciary capacity (personal representative or administrator).
• Keep records demonstrating that no distributions were made and documenting any income or gains. Good records simplify tax reporting and protect the personal representative if questions arise later.
• If the estate is complex (real estate sales, business interests, securities sold, or potential estate tax exposure), consult a qualified estate attorney or CPA experienced with fiduciary tax returns.
• Look up current federal filing thresholds and the current federal estate tax exclusion before deciding whether to file Form 706 — those figures change from year to year: IRS: About Form 706.
• For Illinois state filing and estate tax questions, visit the Illinois Department of Revenue: Illinois Department of Revenue.