Detailed answer — federal and Maryland context

Short answer: Usually no, you do not have to file a federal fiduciary income tax return (Form 1041) for an estate that produced less than $600 in gross income during the tax year and had no nonresident alien beneficiaries. But you must review all receipts and transactions carefully. Some receipts that look like principal can count as income and can create a filing obligation even if you made no distributions to beneficiaries.

Which federal return matters and the basic threshold

The federal return for estates that receive income after a person’s death is Form 1041, U.S. Income Tax Return for Estates and Trusts. The IRS requires filing Form 1041 if an estate has gross income of $600 or more during the tax year, or if the estate has a beneficiary who is a nonresident alien. See the IRS Form 1041 overview and instructions for details: About Form 1041 (IRS) and Instructions for Form 1041 (IRS).

What counts as gross income for the estate?

Gross income for the $600 threshold includes items the estate actually receives during administration, such as:

• Interest and dividends earned by estate bank or brokerage accounts
• Rent from estate-owned real estate
• Business income generated by estate-owned businesses
• Capital gains from sales of estate assets (if the sale occurs in the estate period and gains are allocable to the estate)

By contrast, receipts that are distributions of principal (for example, a direct transfer of cash from a probate account that represents previously owned assets distributed to beneficiaries) generally are not taxable income of the estate. But sales of estate property that produce capital gain do generate taxable income unless passed through to beneficiaries under the tax rules.

Final individual return vs. estate return

The decedent’s final individual income tax return (Form 1040) covers income earned by the individual up to the date of death. Any income the estate receives after the date of death is reported on the estate’s return (Form 1041) if filing is required. If the estate receives only principal and no taxable income after death, the estate usually will not meet the $600 threshold.

Distributions to beneficiaries and Schedule K-1

If the estate does have taxable income and distributes that income to beneficiaries, the estate may still need to file Form 1041 and issue Schedule K-1s to beneficiaries so they report their share on their personal returns. Even when the estate makes no distributions during the tax year, the filing obligation depends on whether the estate itself had gross income above the threshold.

Nonresident alien beneficiary rule

Even if gross income is under $600, Form 1041 must be filed if the estate has a beneficiary who is a nonresident alien. Check the Form 1041 instructions for details: Form 1041 (IRS).

Deadlines, EIN and extensions

Filing deadlines follow the same calendar rules as individual returns for calendar-year estates: Form 1041 is normally due by April 15 for calendar-year estates (see current IRS guidance for exact due dates and any year-by-year changes). The estate must obtain an Employer Identification Number (EIN) to file Form 1041 — you can apply online: Apply for an EIN (IRS). If you need more time, the estate can request an extension to file using Form 7004: Form 7004 (IRS). Note: an extension to file is not an extension to pay any tax owed.

Maryland state estate tax and other state filings

Maryland has its own estate tax rules and may require state filings separate from federal returns. Even if no federal Form 1041 is required, the estate may still need to file Maryland estate tax forms if the gross estate meets the state threshold. For Maryland estate tax information, visit the Maryland Taxpayer Services page on estate tax: Maryland estate tax information. Consult a Maryland tax professional for state-specific filing thresholds and forms.

Common scenarios (hypotheticals)

Hypothetical A — Small bank interest only: The estate receives $150 in bank interest after death and no other income and has only resident beneficiaries. Because gross estate income is under $600, Form 1041 is not required for that year.

Hypothetical B — Sale of stock: The personal representative sells a share of stock owned by the estate and realizes $2,000 capital gain during administration. That $2,000 is gross income of the estate and triggers a Form 1041 filing and likely tax liability for the estate (unless the gain is allocated to beneficiaries via K-1).

Hypothetical C — No income but distributions: If the estate makes distributions of principal (for example, paying heirs the cash from the probate checking account) but receives no interest, dividends, rent, or gains, then Form 1041 is usually not required.

What you should do next

• Gather all estate account statements and transaction records from the date of death onward.
• Identify any interest, dividends, rent, business income, or gains received by the estate in the tax year.
• Check whether any beneficiary is a nonresident alien.
• Obtain an EIN for the estate if you have not already.
• If gross income meets or exceeds $600, prepare to file Form 1041 and issue Schedule K-1s as appropriate, or consult a tax professional to determine whether income should be allocated to beneficiaries or reported by the estate.

Resources:

• Form 1041 and related resources (IRS)
• Instructions for Form 1041 (IRS)
• Form 7004 — Application for Extension (IRS)
• Apply for an EIN (IRS)
• Maryland estate tax information

Disclaimer: This is general information only and does not constitute legal or tax advice. I am not a lawyer or tax advisor. For advice specific to your situation, consult a qualified Maryland tax attorney or CPA who handles estates.

Helpful Hints

• Keep estate financial records separate from your personal accounts. Use one estate bank account for incoming income and payments.
• Track dates: income received after the date of death belongs to the estate and may create a filing requirement.
• If total estate gross income is near $600, double-check all small sources (interest, dividends, rent). Minor items can push you over the threshold.
• Obtain an EIN early — you need it to file Form 1041, open estate bank accounts, and report income.
• If you expect to owe tax, do not rely on an extension of time to file to delay payment. The extension only postpones filing, not payment.
• When in doubt, consult a Maryland estate tax professional — federal and state rules can interact in ways that change filing obligations.