(The Will and the Way) Kaestner’s Final Chapter: North Carolina Abandons Beneficiary-Based Fiduciary Income Taxation

On July 2, 2026, Governor Josh Stein signed Session Law 2026-31. Section 1.3 of the Act fundamentally rewrites North Carolina’s fiduciary income tax regime. Effective for taxable years beginning on or after January 1, 2026, North Carolina no longer attempts to tax the accumulated income of trusts merely because that income may benefit a resident beneficiary. Instead, North Carolina now focuses principally on income derived from North Carolina sources. Note: This article will be published in the... By: Womble Bond Dickinson