Form 4970: Tax on an Accumulation Distribution From a Trust
Published November 8, 2026
Form 4970 figures the tax on an accumulation distribution from certain trusts. An accumulation distribution is a distribution of income that a trust had built up in earlier years. The beneficiary who receives it uses this form to figure extra tax.
This post is general information from the 2025 Form 4970. It does not say whether a distribution is an accumulation distribution, and it does not give tax advice for a particular beneficiary.
Who uses the form
The instructions say a beneficiary of certain domestic trusts uses Form 4970. The trustee tells the beneficiary about an accumulation distribution by completing Part IV of Schedule J (Form 1041). Keep the trust's copy of Part IV with your records.
If you receive distributions from more than one trust in the same year, the instructions say to prepare a separate Form 4970 for each trust.
The $1,000 threshold
The instructions set a special rule for certain trusts. The rule counts only trusts where the sum of this accumulation distribution and any earlier accumulation distributions is $1,000 or more. Check the instructions before you apply the special rule.
Part I: average income and computation years
Part I starts with the amount of the current distribution that is treated as distributed in earlier years. Line 1 uses column (a) from Schedule J (Form 1041), line 37. Line 2 removes income accumulated before you were born or reached age 21. Lines 4 through 8 add the trust's taxes and tax-exempt interest, and count the earlier years that the amount is treated as distributed.
Line 9 divides the amount by the number of earlier years. Line 10 multiplies that average by 25%. Line 11 is the number of earlier tax years to use. Line 12 gives the average amount used to recompute tax. Line 13 lists your taxable income for the five years before the distribution.
Part II: the recomputed tax
Part II recomputes tax for three years. Line 14 uses the taxable income for the years that remain after you remove the highest and lowest years. Line 15 adds the average from line 12 in each column. The form then steps through income tax, credits, and alternative minimum tax adjustments.
Line 25 divides the total on line 24 by 3.0. Line 26 multiplies that result by the number of years on line 11. Line 28 subtracts the tax on line 4 to get the partial tax attributable to the accumulation distribution. If the result is zero or less, enter -0-.
Records to keep
- Schedule J (Form 1041), Part IV, from the trust.
- Your taxable income for the five years before the distribution.
- Records of any earlier accumulation distributions from the same trust.
For the trust return itself, see Estate Income and Form 1041: The Basics.
Where the trust figures come from
The trustee gives the beneficiary Part IV of Schedule J (Form 1041). The beneficiary uses the figures in that part to fill in Form 4970. If a figure is unclear, ask the trustee before you file, and keep the trustee's statement with the schedule.
Checking the threshold
A beneficiary who receives a small distribution still needs to check the $1,000 rule. The rule counts the current distribution together with earlier accumulation distributions from the same trust. Keep a running total for each trust so the check is easy to repeat.
Working through the parts
Part I builds the average and the number of computation years. Part II recomputes the tax for those years. The two parts depend on each other, so complete them in order and check each line before you move on.
Keep a complete file
Keep a copy of every Schedule J (Form 1041) you receive, with the trust's name and the year of each distribution. The form asks for these details, and a complete set of copies makes the return easier to check.
Sources: Sources: IRS, Form 4970, Tax on Accumulation Distribution of Trusts (2025) (https://www.irs.gov/pub/irs-pdf/f4970.pdf) This is general information, not advice about your specific return.
