Form 1041-QFT – Composite Filing, Deadlines, EINs, NIIT

I still remember a partner calling me on a Friday afternoon, voice tight, because a composite Form 1041‑QFT was due Monday and the attachment did not reconcile. The trusts were correct, the math was fine, but the separate‑interest schedule missed two lines of capital gain detail.

That tiny omission would have triggered an IRS notice and weeks of back‑and‑forth. We fixed it, the return went out, and the team slept that weekend. If you have ever lived that moment, this guide is for you.

You are managing money set aside for one of life’s most sensitive needs. The tax rules are clear once you see the pattern, and this walkthrough gives you the pattern, the “why,” and the exact checkpoints to file clean, on time, and with confidence.

Key Takeaways

• Form 1041‑QFT is the income tax return for a Qualified Funeral Trust that holds funds for funeral or burial services of named individuals. The QFT is a separate taxpayer once elected.
• Make the QFT election by timely filing Form 1041‑QFT for the first year you want QFT status, and you cannot revoke it without IRS consent.
• For calendar‑year QFTs, the 2024 return is due on April 15, 2025. Short years are due on the 15th day of the fourth month after period end.
• Extensions use Form 7004 and extend time to file, not time to pay.
• In a composite return, you must attach a per‑trust schedule with beneficiary or owner details, income by type, deductions, credits, tax, payments, and termination dates, and it must reconcile to the return totals.
• Each beneficiary’s separate‑interest share is treated as its own QFT for computing income, deductions, NIIT, and tax.

What Is a Qualified Funeral Trust, in Plain English

A Qualified Funeral Trust, or QFT, is a domestic trust created under a contract with a funeral or burial provider, and its only job is to hold, invest, and use those funds solely to pay the beneficiary’s funeral or burial costs. The only beneficiaries are the individuals who will receive those services, and contributions are made by or for their benefit.

The “Separate‑Interest” Rule

If a QFT covers more than one beneficiary, you do not treat it as one blob. For tax purposes, each beneficiary’s separate interest is treated as a separate QFT. The trustee can use any reasonable, well‑documented method to determine each interest. This rule governs how you compute income classes, NIIT, credits, and tax on the return.

The Basics You Need Before You File

• Use a calendar year for QFTs unless a short year applies.
• Obtain an EIN for the QFT. If you file a composite Form 1041‑QFT, you must also obtain a separate EIN for each composite return you file.
• Keep workpapers structured and labeled so reviewers can trace every number back to source.

Making the QFT Election the Right Way

You make the election by filing Form 1041‑QFT by the due date, including extensions, for the first year you want QFT treatment. You can elect in the first qualifying year or a later year. Once made, the election sticks unless the IRS agrees to revoke it. File per trust, so you only confer QFT status where you intend.

Election Snapshot

Requirement	Why it matters
Timely filing of Form 1041‑QFT	Establishes QFT status, avoids grantor treatment.
Per‑trust election	Keeps status limited to intended trusts.
Irrevocable without consent	Prevents flip‑flopping that confuses tax treatment.
Composite data attachment	Supports per‑trust allocations and beneficiary identification.

Tip: If you plan to move existing EINs into a composite workflow and will not use an old EIN again, file a “Final” Form 1041 for that EIN per IRS instructions.

Filing Deadlines, Extensions, and Where to Send the Return

Here is the timing you should calendar. For 2024 calendar‑year QFTs, the filing deadline is April 15, 2025. If you have a short year, file by the 15th day of the fourth month after the period closes. If the due date lands on a weekend or legal holiday, use the next business day. These dates also apply to composite QFT returns.

Reminder: File Form 7004 by the original due date if you need extra time. This extends filing only, not payment. Interest runs from the original due date, and late‑payment penalties may apply if tax is unpaid.

Where to File in 2025

• Paper filing address for Form 1041‑QFT: Department of the Treasury, Internal Revenue Service, Kansas City, MO 64999. The IRS “Where to File” page confirms this address for Form 1041‑QFT in calendar year 2025.
• Private Delivery Services: You can use designated PDS to meet timely‑mailing rules, but PDS cannot deliver to P.O. boxes. Check the current list of designated services and the street addresses for PDS on IRS.gov before you ship.

Addresses change more often than instruction PDFs, so always confirm on the IRS “Where to file” pages, which the IRS notes are kept current for 2025.

Key Filing Dates You Can Trust

• Regular due date for 2024 calendar‑year QFTs, April 15, 2025.
• Short year, 15th day of the fourth month after the short year ends.
• Extension request, file Form 7004 by the original due date.

Composite Returns, Done Correctly

A trustee may file one composite Form 1041‑QFT for some or all QFTs they administer, and this can include short‑year QFTs. Composite filing is not a shortcut for math. It is simply a cover sheet that totals per‑trust calculations you already computed at the separate‑interest level.

The Required Attachment, Line by Line

Attach a statement that lists, for each included QFT or separate interest treated as a QFT:

• Owner or beneficiary name.
• Gross income by type, with separate lines for net short‑term capital gain, net long‑term capital gain, 28% rate gain, and unrecaptured section 1250 gain.
• Each allocable deduction and credit.
• Tax and payments for that QFT.
• Any termination date during the year. This statement must reconcile to the totals on the composite return.

Per‑QFT item	Include on the statement
Identification	Owner or beneficiary, and if the owner has multiple beneficiaries, separate by shares.
Income detail	Interest, dividends, other income, and capital gain detail by required categories.
Deductions and credits	Show amounts and types clearly.
Tax and payments	Per‑QFT tax computed and payments made.
Terminations	List any QFT that ended and the date.

Separate EINs for Composite Returns

If you choose composite filing, you must obtain a dedicated EIN to use only for that composite Form 1041‑QFT. If you file more than one composite return, you need a separate EIN for each one. For a single QFT filing, use the QFT’s own EIN.

Pro move: Label your attachment and workpapers so any reviewer can trace every total on page 1 of Form 1041‑QFT back to a per‑QFT line on your schedule. That is how you avoid “please provide detail” notices.

Getting the Calculations Right, Including NIIT

The composite return is only as good as your per‑interest math. Treat each beneficiary’s separate interest as a distinct QFT for all computations, including net investment income tax. You apply the investment income and deductions to that specific interest, then figure NIIT, credits, and tax before you roll anything up to the composite totals.

Practical Ways to Allocate Separate Interests

• Use a reasonable, documented method, such as pro rata by contributions or percentages from the pre‑need contract.
• Apply the method consistently year over year.
• Maintain support that ties each adjustment entry to the final per‑interest totals you report.

Income, Deductions, and Capital Gain Detail

For capital gains, your attachment must show the four categories separately, because different rates can apply. If a QFT has both net capital gain and taxable income, follow the schedule rules in the QFT instructions when figuring the tax. Keep dividend and interest classes clean and traceable to statements.

NIIT note: QFTs can be liable for NIIT. Use Form 8960 methods, but remember you compute NIIT per separate interest for composite returns.

Estimated Tax, Penalties, and Interest

A QFT generally must pay estimated tax if it expects to owe at least 1,000 after withholding and credits. Compute the requirement at the individual QFT level, not on the composite as a whole.

Safe Harbor Rules for Estates and Trusts

Estates and trusts, including QFTs, follow individual‑style rules with trust‑specific tweaks. To avoid an underpayment penalty, satisfy the smaller of:

• 90% of the current‑year tax, or
• 100% of the prior‑year tax. The 110% rule can apply if the trust’s prior‑year AGI exceeded 150,000, subject to special rules for farming and fishing income.

Topic	Key point
Threshold to pay estimates	Expect to owe ≥ 1,000 after credits.
Safe harbors	90% current year, or 100% prior year, 110% with high prior‑year AGI rules.
Allocation to beneficiaries	Use Form 1041‑T if applicable, mind the 65‑day deadline.
Interest	Charged at a variable rate under section 6621.
Late payment	Generally 0.5% per month, up to 25%.

Important: Form 7004 extends time to file only. It does not extend time to pay. Interest and penalties can apply from the original due date if tax is unpaid.

Mailing and PDS Reminders

If you paper file, the 2025 address for Form 1041‑QFT is Kansas City, MO 64999. If you choose a private delivery service, use an IRS‑designated carrier and the proper street address, since PDS cannot deliver to a P.O. box. Always re‑check the IRS “Where to file” page before you ship.

Signatures, EINs, and Final Assembly

Every Form 1041‑QFT needs three identifiers up top, in this order: calendar year, EIN, and the exact legal name that matches the EIN application. The trustee or authorized representative must sign. If you used a paid preparer, they must sign and include a valid PTIN in the Paid Preparer Use Only section.

EIN Rules You Will Use

• Single QFT filing, use the QFT’s EIN.
• Composite filing, obtain a separate EIN dedicated to that composite Form 1041‑QFT.
• If you do not yet have an EIN by the deadline, apply immediately and follow IRS instructions.

A Quick Compliance Checklist

• Confirm QFT eligibility and separate‑interest mapping.
• Calendar the filing date, April 15, 2025, and set an early internal cutoff for payment funding.
• If needed, file Form 7004 by the original due date. Remember, it extends filing, not payment.
• For composite returns, obtain the composite EIN and prepare an attachment that reconciles to every line on the face of the return.
• Review NIIT and capital gain categories at the per‑interest level, then roll up totals.
• If mailing, validate the current IRS address or PDS street address before shipping.

Frequently Asked Questions

What is Form 1041‑QFT?

It is the income tax return a trustee files for a trust that has elected to be taxed as a Qualified Funeral Trust. You report income, deductions, gains, losses, credits, tax, and payments for the QFT.

What is a QFT, exactly?

A QFT holds, invests, and uses funds solely to pay funeral or burial services or property for a named individual. The trust arises from a contract with a funeral or burial provider, and the only beneficiaries are the individuals for whom the services will be provided.

Do beneficiaries pay tax when QFT funds are used?

Distributions that represent taxable income are reported consistent with the trust’s income character. Track and report income and basis carefully and consider NIIT where applicable. See the Form 1041‑QFT and Form 8960 instructions for details.

Can a trust deduct funeral expenses?

Funeral costs are typically estate expenses, not fiduciary deductions of a dedicated funeral trust. Coordinate with the estate return and keep documentation with the contract and receipts to determine what is allowable. Consult the estate and trust instructions for specifics.

When a Process Helps More Than a Sprint

Composite QFT filings are won or lost in the workflow, not in the last hour. If your firm is balancing heavy compliance seasons with limited reviewer time, a disciplined delivery model, clear SOPs, and standard workpapers will protect your deadlines and your sanity. This is where a structured offshore delivery partner can help, as long as it works inside your systems, honors your templates, and maintains quality and security controls that stand up to review.

At Accountably, we integrate trained offshore teams into firm operations to support tax production without losing review control or documentation quality. If you need a steady way to prepare and reconcile composite Form 1041‑QFT attachments, our model focuses on standardized workpapers, multi‑layer review, and on‑time delivery. Use us when the bottleneck is delivery, not demand.

Conclusion

You now have the map. Confirm eligibility, set up separate interests cleanly, and make the election with a timely Form 1041‑QFT. Calendar April 15, 2025, plan payments early, and use Form 7004 only to extend filing. If you file a composite return, build the attachment first, then the face of the form, and make sure the totals reconcile. Sign with the correct EIN, verify the current mailing address or e‑file path, and keep your workpapers reviewer‑ready. Follow these steps and your QFT filings will be calm, accurate, and on time.

Compliance note: Tax rules and IRS mailing addresses can change. The citations in this guide reflect IRS pages reviewed as of November 4, 2025. Always verify the latest instructions and addresses on IRS.gov before filing.