What is the tax rate for trusts?

In Arizona, trusts are subject to taxation. The tax rate depends on the type of trust, whether it is “revocable” or “irrevocable”. Revocable trusts are taxed like individuals, with a graduated tax rate of 2.59%, 2.88%, 3.36%, 4.24%, and 4.54%. Irrevocable trusts are taxed at the highest individual tax rate of 4.54%. The Arizona legislature recently enacted new legislation that went into effect on January 1, 2019 that makes changes to the taxation of trusts. Under the new law, all trusts are now classified as “single” trusts, unless the trust contains both separate and unified trusts. In the case of single trusts, the tax rate will be the same as that of an individual’s income. For unified trusts, the tax rate is 1.58% on incomes less than $250,000, and 2.59% for incomes over $250,000. In addition to the taxation of trusts, the Arizona legislature also enacted legislation that changes the taxation of estates. Under the new law, estates with a gross estate value of less than $2 million are taxed at the graduated individual tax rate of 2.59%, 2.88%, 3.36%, 4.24%, and 4.54%. Estates with a gross estate value of $2 million or more are taxed at a flat rate of 4.54%. In summary, trusts and estates in Arizona are subject to taxation. The tax rate varies depending on the type of trust and the value of the estate.

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What is the tax rate for trusts?

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