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Last Updated: 12/15/2017

Composite Income Tax for Estates and Trusts

​When an estate or trust has Minnesota-source income, beneficiaries generally must file a state return to report and pay tax on their share. (See Individual Income Tax Instructions for details.)

But qualifying beneficiaries who don’t live in Minnesota – or “nonresident beneficiaries” – may instead elect to have the estate or trust report and pay “composite income tax” on their behalf. (See “Paying Composite Tax,” below.)

To be included in the composite income tax, nonresident beneficiaries can’t have any other Minnesota income beyond what they receive from the estate or trust, or from other entities that pay composite tax. 

Paying Composite Tax

When completing Form M2, Minnesota Income Tax Return for Estates and Trusts, check the “Composite income tax” box on the front of the form. Follow the instructions and complete Schedule KF to determine the amount of composite tax due. (See Form M2 Instructions for more information.)