Updated October 5, 2026. Quick answer: Yes. Utah taxes trust income, and the 2025 return instructions say to “Multiply the Utah taxable income on line 14 by 4.5 percent” to figure the tax.
How Utah treats trust income
| Item | What the documents say |
|---|---|
| Treatment | Utah Code 59-10-201 provides that a tax “is imposed for each taxable year on the state taxable income” of each resident estate or trust. |
| Who counts as a resident trust | The instructions define a resident trust to include “a trust administered in Utah” and a trust of property transferred by will of a decedent domiciled in Utah at death. No beneficiary or grantor residence test is listed there. |
| Rate on trust income | The 2025 instructions apply a single rate to Utah taxable income, and they say to “Multiply the Utah taxable income on line 14 by 4.5 percent”. The statute points to the rate in Subsection 59-10-104(2)(b), which was not retrieved. |
| Distribution deduction | Line 8 of the TC-41 carries over the federal income distribution deduction, and the instruction says to “Enter any income distribution deduction reported on your” federal form 1041, line 18. |
| Nonresident trusts | The instructions treat any trust that is not a resident trust as nonresident, and for a part year resident trust they say “Income from Utah sources is taxable in Utah” during the period of nonresidency. Nonresident and part year trusts also complete schedule TC-41B. |
| Return to file | A fiduciary with Utah source income files Form TC-41 if a federal fiduciary return is required, and the 2025 calendar year return is due April 15, 2026. |
| Exclusions | The statute lists as not subject to the tax a resident estate or trust that is not required to file a federal return for estates and trusts, and “a resident trust taxed as a corporation”. |
A $10,000 example
A trust with $10,000 of taxable income that it keeps, rather than distributes, is taxed at 4.5%, computed as $10,000 x 4.5% = $450, before any deduction or exemption the state allows. Federal tax on the trust’s income still applies.
Income the trust passes out to a beneficiary is handled as the distribution deduction row above describes.
What changes in 2026
The 2025 instructions report that HB 106 lowered the fiduciary tax rate from 4.55 percent to 4.5 percent, and no separate change effective 2026 appears in the documents read.
Federal rules
The state’s treatment sits on top of the federal one. The federal brackets a trust faces are laid out in trust tax brackets versus individual brackets, and capital gains that a trust keeps are covered in capital gains stay in the trust. The IRS explains the federal return in the About Form 1041 page.
Related: how Utah taxes retirement income, whether Utah taxes pensions, what a living trust costs in Utah, and federal trust tax brackets.
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Answer againSources
- 2025 TC-41 Instructions, Utah Fiduciary Income Tax Return (Utah State Tax Commission): https://files.tax.utah.gov/tax/forms/2025/tc-41inst.pdf
- Utah Code 59-10-201, Taxation of resident trusts and estates (Utah Legislature): https://le.utah.gov/xcode/Title59/Chapter10/C59-10-S201_2025101420251206.html
- 2025 TC-41 Utah Fiduciary Income Tax Return (Utah State Tax Commission): https://files.tax.utah.gov/tax/forms/2025/tc-41.pdf
- Utah Code 59-10-103, Definitions (Utah Legislature): https://le.utah.gov/xcode/Title59/Chapter10/C59-10-S103_2025050720250507.html
Sources: the primary documents linked above, read on October 5, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.