Trust Income Tax Brackets: the facts

1. A trust or estate reaches the top 37% federal rate at $16,000 of taxable income in 2026. A single filer reaches it at $640,600; a married couple filing jointly at $768,700.
2. The estates-and-trusts table has four brackets: 10% to $3,300, 24% to $11,700, 35% to $16,000, and 37% above that. There is no 12%, 22%, or 32% bracket for a trust.
3. On $50,000 of taxable income kept in a trust, the federal income tax is $16,431, 32.9% of the income. The same $50,000 in the hands of a single beneficiary with no other income draws $5,752; a married couple, $5,504.
4. The 3.8% net investment income surtax starts at $16,000 for a trust, where its top bracket begins. For individuals the threshold is $200,000 single and $250,000 joint, and it has not been indexed since 2013.
5. Long-term capital gains inside a trust are taxed at 0% up to $3,300, 15% up to $16,250, and 20% above that in 2026. A single filer's 15% band runs to $545,500.
6. Income a trust distributes to beneficiaries within its distributable net income is deducted by the trust and taxed to them instead. A trustee has until the 65th day of the following year to make a distribution count for the prior year.

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