The 65-day rule under Internal Revenue Code 663(b) allows trustees of a trust to treat distributions that are made within the first 65 days of the trust’s tax year as if they were paid or credited on the last day of the preceding tax year. For 2025, the 65th day deadline is March 6. This rule provides trustees with additional time to determine trust income before distributing amounts to beneficiaries. This can help lower overall tax since the trust tax brackets are compressed. For 2024, the 37% tax bracket for a trust begins at $15,200 vs $609,351 for a single individual. The election for the 65-day rule is made on Form 1041, U.S. Income Tax Return for Estates and Trusts, or in a statement filed with the IRS. The election is limited to the greater of the trust’s accounting income or distributable net income for the year. Once made, the election is irrevocable for the tax year and is effective only for the year of election. Beneficiaries must include the amounts covered by the election in their income in the tax year covered by the election.