Grantor Trusts

A grantor trust is not considered a separate taxable entity. The grantor must report income earned by the trust to the Minnesota Department of Revenue by filing Form M2, Income Tax Return for Estates and Trusts.

When filing the trust’s Minnesota return:

• Complete the demographic information for the trust on the Form M2. Don’t record any dollar amounts for the grantor trust on the form itself.
• Attach a copy of the federal Form 1041, U.S. Income Tax Return for Estates and Trusts, and a statement showing trust income, credits and deductions that are attributable to the grantor.
• Attach a separate statement showing the trust’s Minnesota income adjustments that are attributable to the grantor. If the grantor is a nonresident, indicate their Minnesota-source income from the trust.
• All attachments must include the grantor’s name, address and Social Security or Minnesota taxpayer ID number.

Note: If only part of the trust is treated as a grantor trust, report the income and deductions taxable to the non-grantor portion on Form M2 and federal Form 1041. Any amounts taxable directly to the grantor must be reported separately.