Schedule 1 (IT-41)

Schedule 1 (Form IT-41), issued by the Indiana Department of Revenue, is a supplemental form used to report “Other Taxes” that apply to estates and trusts. This form is attached to Form IT-41, the primary Indiana Income Tax Return for Fiduciaries. It allows estates and trusts to calculate and report taxes such as bankruptcy estate taxes, composite taxes, pass-through entity taxes (PTET), electing small business trust (ESBT) taxes, and sales/use taxes.

The form is essential for ensuring that all applicable taxes are reported and accurately calculated. It requires detailed information, including the total number of beneficiaries (where applicable) and amounts from external schedules like the Composite and Composite-COR schedules. Schedule 1 is a critical component of the tax filing process for fiduciaries managing taxable estates or trusts within Indiana.

How To File Schedule 1 (IT-41)?

Filing Schedule 1 (Form IT-41) involves the following steps:

1. Complete Form IT-41: Begin by completing the main Indiana fiduciary income tax return (Form IT-41). You will transfer the total from Schedule 1 onto this form.
2. Fill Out Schedule 1: Accurately calculate and report “Other Taxes” using the instructions provided for each line on Schedule 1.
3. Attach Supporting Schedules: If you are reporting composite taxes or pass-through entity taxes, include relevant schedules such as Schedule Composite or Composite-COR.
4. Submit With IT-41: Attach Schedule 1 to Form IT-41 and submit the complete package to the Indiana Department of Revenue by the filing deadline.

How To Complete Schedule 1 (IT-41): Line-By-Line Instructions

Header Information

1. Name of Estate or Trust: Enter the full name of the estate or trust as it appears on Form IT-41.
2. Federal Employer Identification Number (FEIN): Provide the FEIN of the estate or trust. This must match the FEIN listed on Form IT-41.

Line 1: Bankruptcy Estates

• Report taxes related to bankruptcy estates under Chapter 7 or Chapter 11 of the U.S. Bankruptcy Code.
• Refer to the Schedule 1 instructions or supporting documentation to determine the amount of tax owed.
• Enter the calculated amount on Line 1. If no tax applies, enter “0.00.”

Line 2: Composite Tax

• This line is for reporting taxes related to composite filings for nonresident beneficiaries.
• Line 2a: Enter the total number of beneficiaries listed on Schedule Composite and Schedule Composite-COR (if applicable). These schedules report the income and taxes for nonresident beneficiaries who participate in composite filings.
• On Line 2, report the total composite tax owed based on the information from the schedules. If no composite taxes apply, enter “0.00.”

Line 3: Pass-Through Entity Tax (PTET)

• This line is for reporting taxes owed by pass-through entities, such as S corporations or partnerships, which have elected to pay tax at the entity level.
• Use the instructions for PTET calculations to determine the appropriate tax amount. This may involve referencing additional schedules or certification documents.
• Enter the calculated PTET amount on Line 3. If no PTET applies, enter “0.00.”

Line 4: Electing Small Business Trusts (ESBTs)

• This line applies to taxes owed by Electing Small Business Trusts (ESBTs), which must report income from S corporation shares separately.
• Use the instructions specific to ESBTs to calculate the tax amount. Ensure you follow the guidelines for separating S corporation income from other taxable income.
• Enter the calculated ESBT tax amount on Line 4. If this does not apply, enter “0.00.”

Line 5: Sales or Use Tax

• Report any sales or use tax owed on taxable purchases made by the estate or trust during the tax year. This applies to purchases where Indiana sales tax was not collected at the time of purchase (e.g., online purchases or out-of-state transactions).
• Calculate the total use tax owed based on the purchase price of taxable items and the applicable Indiana sales tax rate.
• Enter the calculated sales or use tax amount on Line 5. If no sales or use tax applies, enter “0.00.”

Line 6: Total Other Taxes

• Add the amounts from Lines 1 through 5.
• Enter the total on Line 6. This amount represents the total “Other Taxes” owed by the estate or trust.
• Transfer this total to Line 11 on Form IT-41.

Key Tips For Completing Schedule 1 (IT-41)

1. Round All Entries: Round all amounts to the nearest whole dollar as required by the Indiana Department of Revenue.
2. Use Supporting Schedules: Ensure all necessary supporting schedules (e.g., Schedule Composite, Schedule Composite-COR) are completed and attached when applicable.
3. Double-Check Calculations: Verify that all calculations are accurate to avoid errors or delays in processing your tax return.
4. Keep Documentation: Retain copies of all supporting documentation, as the Indiana Department of Revenue may request verification of reported amounts.
5. Consult Instructions: The official instructions for Form IT-41 and Schedule 1 provide detailed guidance on calculating and reporting each type of tax.