Federal income taxation of nongrantor trusts is not an easy subject. Often forgotten in considering the federal income tax consequences of trusts and estates are state income taxes, which adds further complexity. This is doubly so since different states have different rates of tax, and different circumstances when taxes will be applied. These differences can turn on whether there is a beneficiary in the applicable state, whether there is a resident trustee, where the trust is administered, and whether the trust was created by a resident of the state.
Richard Nenno of Wilmington Trust Company has prepared a useful survey of the rates and incidents of income taxation of estates and nongrantor trusts in each of the 50 states. A copy of the report can be accessed here.
Bases of State Income Taxation of Nongrantor Trusts, by Richard W. Nenno (June 4, 2013).