Updated October 24, 2026. Quick answer: Line 7 of the Pennsylvania PA-40 is where a beneficiary reports estate or trust income. The form tells you to complete and submit PA Schedule J, and the booklet says a beneficiary cannot report a loss on this line. The line 7 amount then goes into the line 9 total. This page walks through what the booklet and the form print for line 7.
What this line does
The booklet’s instruction heading for this line is “ESTATE OR TRUST INCOME”. On the form, line 7 sits on the first side, the page marked Side 1, and reads “Estate or Trust Income. Complete and submit PA Schedule J.”
The booklet’s page 8 reminds filers how income reaches the return: “You must report your income (loss) by applicable class, whether it is received directly, as estate or trust income or as a distributive share of the income of a partnership or PA S corporation.” Line 6, covered on Pennsylvania Form PA-40 line 6, comes just before it. For the whole sequence see Pennsylvania Form PA-40 line by line.
Who it applies to
The instruction is written for beneficiaries: “As a beneficiary of an estate or trust, you report the total PA-taxable income that the estate or trust must distribute, pay, or credit to you on PA Schedule J.”
Settlors of revocable trusts are told to report differently: “If you establish a revocable trust, report the income (loss) that the trust earns, receives, and realizes in the appropriate PA income class on your PA-40 personal income tax return.” The state’s general treatment of trust income is covered on whether Pennsylvania taxes trust income.
For the state’s separate inheritance tax and estate tax, see Pennsylvania inheritance tax and whether Pennsylvania has an estate tax. Federal estate return reporting is covered on Form 1041 for estates.
What the instructions say
| Line | What the form says |
|---|---|
| Form, line 7 | “Estate or Trust Income. Complete and submit PA Schedule J.” |
| Beneficiaries | “As a beneficiary of an estate or trust, you report the total PA-taxable income that the estate or trust must distribute, pay, or credit to you on PA Schedule J.” |
| No loss as a beneficiary | “You cannot report a loss as a beneficiary for PA purposes.” |
| Which Schedule K-1 | “You should receive a PA Schedule RK-1 and/or NRK-1 from the estate or trust.” |
| A federal Schedule K-1 | “If you received a federal Schedule K-1, you must report only the total income, not taking into account any losses, shown on the federal Schedule K-1.” |
| What the federal total adds up | “Add the total of income reported on federal Schedule K-1 as interest, dividends, long-term and short-term gains, annuities, royalties, trade or business income, rental income, etc.” |
| Amounts already on another schedule | “If you included any of these amounts on a PA schedule, other than PA Schedule J, adjust your PA schedule(s) accordingly.” |
| Photocopy of the federal K-1 | “Include a photocopy of the federal Schedule K-1 with your return for each nonresident estate or trust and/or each estate or trust for which you fail to receive a PA Schedule RK-1 and/or NRK-1.” |
| Gifts and inheritances | “Cash and property you acquire from an estate or trust by gift, bequest, devise, or inheritance is not taxable.” |
| Income earned later | “You must report any PA-taxable income that you subsequently earn or receive from that cash or property.” |
| Revocable Trusts, who does not file | “The person (settlor) who establishes a revocable trust (including grantor trusts that are revocable) does not file a PA-41 if, under the governing instrument, they retain the authority to:” |
| Revocable Trusts, where income goes | “If you establish a revocable trust, report the income (loss) that the trust earns, receives, and realizes in the appropriate PA income class on your PA-40 personal income tax return.” “Do not report the amounts on PA Schedule J.” |
| Revocable Trusts, labelling | “When submitting supporting schedules and statements showing the name of the trust, write REVOCABLE clearly on the schedule.” |
| Grantor Trust, the statute | “Act 64 of 2023 (SB 815) provides that personal income received by a resident trust, and the classes of income received by a nonresident trust from sources within this Commonwealth, shall be taxable to the grantor of the trust or another person to the extent the grantor or other person is treated as the owner of the trust under specified sections of the Internal Revenue Code of 1986, as amended” |
| Grantor Trust, how to file | “Grantor trusts should file using the same method they do for federal purposes (the Default Method, Optional Method 1, or Optional Method 2).” |
Where the result goes next
Line 9 picks up line 7 along with the other income classes: “Total PA Taxable Income. Add only the positive income amounts from Lines 1c, 2, 3, 4, 5, 6, 7, and 8.” Line 9 is covered on Pennsylvania Form PA-40 line 9.
The booklet also says “Submit the required Pennsylvania schedule for each amount you report on Lines 4 through 8.” For line 7 that schedule is PA Schedule J.
Edition and line numbers
This page reads 2025 PA Personal Income Tax Return Instructions (PA-40 IN), Pennsylvania Department of Revenue, and 2025 Form PA-40, Pennsylvania Income Tax Return, Pennsylvania Department of Revenue, for tax year 2025, the current files the Pennsylvania Department of Revenue served on 2026-10-24. Check the edition printed on your own form and use that edition’s line numbers.
Common mistakes
- Reporting a loss from an estate or trust. The booklet says “You cannot report a loss as a beneficiary for PA purposes.”
- Reporting a gift or bequest itself as income. The booklet says “Cash and property you acquire from an estate or trust by gift, bequest, devise, or inheritance is not taxable.” Income earned afterward is a separate matter.
- Using Schedule J for a revocable trust you set up. The booklet says “Do not report the amounts on PA Schedule J.”
Related: whether Pennsylvania taxes trust income, Pennsylvania inheritance tax, whether Pennsylvania has an estate tax, and Form 1041 for estates.
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Answer againSources
- 2025 PA Personal Income Tax Return Instructions (PA-40 IN), Pennsylvania Department of Revenue: www.pa.gov
- 2025 Form PA-40, Pennsylvania Income Tax Return, Pennsylvania Department of Revenue: www.pa.gov
- Related official page (not quoted): Pennsylvania Department of Revenue, personal income tax forms and publications: www.pa.gov
Read from the state revenue documents linked above on October 24, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the state revenue department is the right place to confirm anything consequential.