Trust and Estate Income Tax Brackets by Year, 2017–2027

Disclaimer: General educational research only — not legal, tax or financial advice. Tax rules change, and a trust’s own terms matter. Confirm figures with the IRS and a tax professional before acting.

Estate Planning Data & Research → Trust and estate income tax brackets by year

A trust or estate that keeps its income pays federal income tax on a much faster schedule than a person does. In 2027, a trust or estate reaches the top 37% rate once its taxable income passes $16,500. A single filer doesn’t reach 37% until $661,375, which is about 40 times higher. This page gathers the IRS’s official estate and trust rate schedule for every year from 2017 through 2027, along with the capital-gains breakpoints. It also explains what the compressed brackets mean when you choose between a will, a revocable living trust and an irrevocable trust.

If you’re deciding whether a will or a living trust fits your family, start with our plain-English guide to trust vs. will. It covers what each one costs, what probate means for your heirs, and when a trust is worth it.

Key findings

• 2027: 10% on the first $3,400, then 24% up to $12,100, 35% up to $16,500, and 37% on everything above $16,500 (Rev. Proc. 2026-35, Table 5).
• About 40 times faster: since the 2017 tax law (Public Law 115-97) took effect in 2018, the 37% rate has started at about 1/40th of the single-filer threshold every year. In 2027 that’s $16,500 for a trust and $661,375 for a single person (40.1×).
• On $50,000 of kept income in 2027, a trust owes $16,363 of regular federal income tax under this schedule.
• The extra 3.8% kicks in at the same low point. The net investment income tax applies to a trust’s undistributed investment income above the dollar amount where its top bracket begins ($16,500 in 2027). For a single person the threshold is $200,000.
• Capital gains also compress. A trust’s long-term gains and qualified dividends are taxed at 0% only up to $3,400 in 2027 and at 20% above $16,750 (Rev. Proc. 2026-35).
• The rates are permanent under current law. Public Law 119-21 made the 10/24/35/37 schedule permanent. The thresholds keep rising with inflation each year; 2027 is the latest official set.

Trust and estate income tax brackets by year

Ordinary income kept by a non-grantor trust or an estate (Form 1041). “Top rate starts over” is the taxable income at which the highest rate begins. “Tax at that point” is the IRS’s base tax at that threshold.

How to read a row: in 2027, a trust with $20,000 of taxable ordinary income owes $3,968 plus 37% of the $3,500 above $16,500, for a total of $5,263. Before 2018 the schedule had five rates, and the capital-gains rates followed the regular brackets: 0% inside the 15% bracket, 15% in the middle and 20% in the 39.6% bracket. Since 2018 the capital-gains breakpoints have been set separately by statute, which is why they don’t exactly match the ordinary brackets.

Why trust brackets are so compressed

Congress set up the estate and trust rate schedule so that income piling up inside a trust is taxed quickly. The idea is that trusts generally shouldn’t serve as a lower-tax place to park investment income. The schedule is in section 1(e) of the Internal Revenue Code, and for 2018 onward in section 1(j)(2)(E). Over the past decade the thresholds have moved only with inflation. The 37% starting point rose from $12,500 in 2018 to $16,500 in 2027, up 32%. The single-filer threshold rose by a similar percentage, from $500,000 to $661,375.

The schedule mostly affects income that stays in the trust. Trusts and estates get a deduction for income they distribute to beneficiaries. That income is then reported to each beneficiary on a Schedule K-1 and taxed at the beneficiary’s own rates. That’s why the same $50,000 can cost very different amounts depending on whether the trustee keeps it or pays it out.

Which trusts actually pay these rates

• Revocable living trusts during your lifetime: usually not. A revocable trust is a grantor trust. Its income is reported on your own Form 1040 at your personal rates, exactly as if the trust didn’t exist. Setting one up to avoid probate doesn’t trigger the compressed brackets.
• Irrevocable non-grantor trusts: yes. Many trusts that continue after a death are taxed on Form 1041 at the schedule above: trusts for children until a set age, many bypass and credit-shelter trusts, and many third-party special needs trusts. That applies to any income they keep rather than distribute.
• Estates during probate: yes. A decedent’s estate files Form 1041 if it has $600 or more of gross income for the year. It pays these rates on income it doesn’t distribute, such as interest, dividends, rent from a house waiting to be sold, or gains on assets sold during administration.
• Revocable trusts after the grantor’s death: yes. At death the trust becomes irrevocable and generally becomes a separate taxpayer. The trustee can elect under section 645 to treat it as part of the estate for income tax purposes, which allows a fiscal year and some estate-only rules.
• Some irrevocable grantor trusts: no. Certain irrevocable trusts are deliberately written as grantor trusts, so the creator keeps paying the income tax personally. That’s a design choice made when the trust is drafted.

What this means if you’re planning

• The type of trust matters more than having one. A revocable living trust gives your family probate avoidance and incapacity planning without any change to your income tax while you’re alive. The compressed brackets only become an issue for trusts meant to hold money for years after a death.
• Build in distribution flexibility. If a trust will hold assets for a child or grandchild, giving the trustee discretion to distribute income lets the trustee shift taxable income to beneficiaries in lower brackets when that makes sense. A trust that can only accumulate income may pay 37% plus 3.8% on most of its earnings.
• Know the 65-day rule. Under section 663(b), a trustee or executor can elect to treat distributions made in the first 65 days of a year as made in the prior year. That gives fiduciaries time after year-end to see the numbers and move income out of the compressed brackets.
• Think about what the trust holds. Growth assets that produce little current income, municipal bonds, or a home a beneficiary lives in produce less taxable income at the trust level than high-yield bonds or rental property.
• Weigh the tax against the protection. Keeping money in trust often has good reasons: protecting a beneficiary with a disability, creditor or divorce exposure, or a young or inexperienced heir. Sometimes the higher tax is a fair price for that protection. A qualified disability trust also gets a larger exemption than the $100 most complex trusts receive.
• Estates should plan their timing. Executors can choose a fiscal year, time asset sales, and distribute income in the year it’s earned to limit tax at the estate level.

How many trusts and estates file

The IRS’s latest detailed study of Form 1041 returns covers tax year 2022. It counted 3,195,251 fiduciary income tax returns, and 1,151,087 of them reported positive taxable income. Trusts and estates deducted $89.8 billion of income distributed to beneficiaries that year. That income was taxed on the beneficiaries’ returns instead of at the trust rates. For counts by state and trust type, see Where families use trusts.

Related research: those compressed brackets are why trusts pay so much income out. In 2023, 648,583 individual returns reported $47.9 billion of estate and trust income on Schedule E. See trust and estate income on tax returns.

Methodology

• Brackets for 2017 and 2019–2026 come from Table 5 (Estates and Trusts) of each year’s IRS inflation-adjustment revenue procedure: Rev. Proc. 2016-55, 2018-57, 2019-44, 2020-45, 2021-45, 2022-38, 2023-34, 2024-40 and 2025-32.
• 2027 figures come from Rev. Proc. 2026-35 (IR-2026-133, Nov. 5, 2026): Table 5 ordinary brackets ($3,400 / $12,100 / $16,500; base tax at the top threshold $3,968); maximum zero-rate and 15% capital-gains amounts for estates and trusts ($3,400 and $16,750); and the unmarried (single) 37% threshold from Table 3 ($661,375).
• 2018 figures come from the statute itself, 26 U.S.C. 1(j)(2)(E) for the rate table and 1(j)(5)(B) for the capital-gains breakpoints, because Public Law 115-97, enacted in December 2017, replaced the 2018 schedule the IRS had already published.
• Capital-gains columns are the maximum zero-rate and 15%-rate amounts for estates and trusts. For 2017 they equal the ends of the 15% and 33% ordinary brackets, as under prior law.
• The $50,000 comparison applies each year’s ordinary-income schedule to $50,000 of taxable income. It ignores exemptions, deductions, the net investment income tax and state tax.
• Every figure was re-parsed from the original IRS and U.S. Code documents and checked arithmetically: each base tax equals the sum of the lower brackets.
• Form 1041 counts are from IRS Statistics of Income, Fiduciary Income Tax Returns, tax year 2022, Table 1.
• This is national data. Federal trust income tax rules are the same in every state. Many states also tax trust income, with residency rules that vary, and those aren’t included here.

Frequently asked questions

What is the 2027 tax rate for a trust?

For income a non-grantor trust keeps in 2027, the rate is 10% up to $3,400, 24% up to $12,100, 35% up to $16,500 and 37% above $16,500 (Rev. Proc. 2026-35). Long-term capital gains and qualified dividends are taxed at 0% up to $3,400, 15% up to $16,750 and 20% above that.

What is the 2026 tax rate for a trust?

For income a non-grantor trust keeps in 2026, the rate is 10% up to $3,300, 24% up to $11,700, 35% up to $16,000 and 37% above $16,000. Long-term capital gains and qualified dividends are taxed at 0% up to $3,300, 15% up to $16,250 and 20% above that.

Does a revocable living trust pay these higher rates?

No, not while you’re alive. A revocable living trust is a grantor trust, so its income goes on your personal return at your normal rates. The trust rates can apply after your death, when the trust becomes irrevocable and starts filing its own Form 1041.

Do estates pay the same rates as trusts?

Yes. Decedents’ estates and non-grantor trusts use the same rate schedule. An estate must file Form 1041 if it has gross income of $600 or more for the tax year.

How can a trust avoid the 37% bracket?

The main tool is distributing income to beneficiaries, who then pay tax at their own rates. The trust deducts what it distributes. The 65-day election lets a trustee count early-year distributions toward the prior year. Choosing investments and the timing of sales also matters. Whether to distribute should still follow the trust’s purpose, not just the tax result.

When were the 2027 trust tax brackets released?

The IRS published them in Rev. Proc. 2026-35 on Nov. 5, 2026 (IR-2026-133). This page now includes the official 2027 row.

Does the net investment income tax apply to trusts?

Yes. A non-grantor trust or estate owes an extra 3.8% on the lesser of its undistributed net investment income or its adjusted gross income above the dollar amount where its top bracket begins, which is $16,500 in 2027. For individuals the threshold is $200,000 for single filers and $250,000 for married couples filing jointly, and it isn’t adjusted for inflation.

Sources

Primary

• IRS Rev. Proc. 2026-35, Table 5 (Estates and Trusts) and § 1(j)(5) capital-gains amounts; Table 3 unmarried top rate: https://www.irs.gov/pub/irs-drop/rp-26-35.pdf
• IRS newsroom IR-2026-133 (Nov. 5, 2026): https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2027-taxpayers-continue-to-benefit-from-the-working-families-tax-cuts
• Prior years: Rev. Proc. 2016-55, 2018-57, 2019-44, 2020-45, 2021-45, 2022-38, 2023-34, 2024-40, 2025-32 (Table 5 each)
• 2018 schedule from 26 U.S.C. § 1(j)(2)(E) and § 1(j)(5)(B): https://www.law.cornell.edu/uscode/text/26/1
• IRS SOI Fiduciary Income Tax Returns, tax year 2022, Table 1 (Form 1041 counts)

Notes

• 2027 ordinary brackets, base tax at the top threshold, and estate/trust capital-gains 0%/15% max amounts are from Rev. Proc. 2026-35. Single-filer 37% threshold is from Table 3 of the same revenue procedure.
• Every base tax was recomputed as the sum of the lower brackets; the $50,000 worked example applies the ordinary schedule only.

Cite this data

Published November 6, 2026 by Family Estate Guide. Data vintage: IRS Rev. Proc. 2026-35 (tax year 2027) and prior years through Rev. Proc. 2025-32; IRS SOI Form 1041 study, tax year 2022. Editorial standards.