California Amends Tax Code for Nongrantor Trusts’ Income Inclusion

The California Governor signed a law amending Section 17082 of the Revenue and Taxation Code, establishing rules for including income from incomplete gift nongrantor trusts in a qualified taxpayer’s gross income. The law provides an exception for trusts that elect to be taxed as resident nongrantor trusts and distribute at least 90 percent of their distributable net income to charitable organizations. The amendment revises the definition of incomplete gift nongrantor trust to specifically exclude a trust, or portion of a trust, that qualifies as a charitable remainder trust. [S.B. 376, enacted 10/06/25]

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