Detailed Answer
When someone passes away, the executor must open a new tax identity in the name of the estate. The IRS requires an Employer Identification Number (EIN) to handle estate assets, file the estate’s income tax return (Form 1041), and open fiduciary bank accounts. Under Kentucky law, an executor first needs letters testamentary or letters of administration issued by the probate court. See KRS 395.110 for appointment of fiduciaries (link).
Follow these steps:
- Obtain Court Issuance: Present the will (if any) and death certificate to the appropriate Kentucky circuit court. After proving the will, the court issues letters testamentary (or letters of administration if no will exists). These letters formally empower you to act on behalf of the estate.
- Gather Required Information: You will need:
- The legal name and address of the decedent.
- Your name, address, and Social Security Number as the responsible party.
- The date the estate is opened (usually the decedent’s date of death).
- The type of entity (select “Estate” on Form SS-4).
- Apply to the IRS Online: The fastest method is the IRS EIN Online Assistant: Apply for an EIN Online. You can complete Form SS-4 in one session and receive your EIN immediately.
- Alternate Submission Methods:
- Fax: Complete Form SS-4 and fax it to the appropriate IRS fax number. You’ll receive your EIN by fax within four business days.
- Mail: Send Form SS-4 to the IRS service center. Processing can take up to four weeks. Be aware of any deadlines for estate tax returns.
- Record and Use the EIN: Use your estate EIN when opening a bank account in the estate’s name. You’ll also need it to file the estate’s federal income tax return (Form 1041). Even if the estate has no taxable income, you must report gross income over $600.
Kentucky-Specific Considerations: Kentucky does not impose a state estate tax, but you must comply with federal estate and income tax rules. For more on Kentucky estate administration, see KRS Chapter 395: Chapter 395.
Disclaimer: This article is for educational purposes only. It does not constitute legal advice. Consult a qualified attorney in Kentucky to address your specific situation.
Helpful Hints
- Before applying, verify the executor’s authority by reviewing the letters testamentary.
- Keep a certified copy of the letters with your estate records.
- Use the estate’s EIN when communicating with financial institutions.
- Note deadlines for Form 1041 and any fiduciary income tax requirements.
- Maintain detailed records of all estate transactions.