Do fiduciaries have to file estate tax returns in North Carolina?

On Behalf of | Sep 1, 2020 | Estate Planning

When it comes to estate tax returns, the laws vary from state to state. In North Carolina, fiduciaries are required to file Form D-407A. It is crucial for fiduciaries to understand the requirements associated with the estate and taxes, since failure to do so can result in harsh consequences. In fact, failing to file estate tax returns on time can result in a penalty of up to 25 percent of the tax that is owed.

If you are setting up an estate plan, you need to carefully consider the tax consequences of your plan. Likewise, if you are in charge of an estate plan, it is crucial to go over tax requirements.

Reviewing estate tax return obligations

On their website, the North Carolina Department of Revenue provides the instructions for Form D-407A, which includes helpful information regarding estate tax return requirements in the state. According to this form, fiduciaries are required to file an estate tax return in North Carolina if they are also obligated to file an estate tax return with the IRS and the estate plan includes assets from a North Carolina source (or a North Carolina resident receives property from the estate).

Reviewing the payment of estate taxes

According to the instructions for Form D-407A, fiduciaries are required to pay estate taxes in full when they file the return. If you are a fiduciary, it is crucial to prepare for estate tax payments and ensure that all obligations are satisfied. Moreover, money orders and checks are not accepted unless they originate from a domestic bank and are payable in U.S. currency.