The changes made by New York’s Budget Bill affect income tax for trusts. Under the new law, state tax applies to income distributions that are received by beneficiaries of a New York resident trust. Grantor trusts are not affected by this tax, nor is income received by beneficiaries prior to 2014. In addition, if the trust itself is taxed by New York State income tax, then the beneficiary will not be subject to the tax.
See Stacie J. Rottenstreich and Karin Barkhorn, New York Budget Bill Makes Changes to Trust Income Tax, Bryan Cave, April 16, 2014.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.
