What is the Targeted Business Tax Credit?

A refundable credit is available to businesses providing a community investment project as defined in UC 63-1-501 through 63-1-503. Obtain a certified copy of Form TC-40TB . Keep this form and all related documents with your records.

Contact the Governor's Office of Economic Development
60 E South Temple, 3rd Floor
PO Box 146950
Salt Lake City, UT 84114-6950
Phone: 801-538-8804
or go to Utah's website for more information.

What is the Special Needs Adoption Credit?

A taxpayer who adopts a child in Utah who has a special need may claim a refundable credit of $1,000. This credit may only be claimed in the year the United States court issues the order granting the adoption. If it's a foreign adoption, you may claim the credit in the year the adoption is registered in accordance with UC Section 78B-6-142. You must be a resident of Utah on the date the adoption order is issued.

To claim this credit, the child must meet one of the following conditions:
  • Be five years of age or older
  • Be under the age of 18 and have a physical, emotional, or mental disability
  • Be a member of a sibling group (two or more persons) placed together for adoption
There is no form for this credit. Keep all related documents with your records.

What is the Agricultural Off-Highway Gas/Undyed Diesel Tax Credit?

The credit is 24.5 cents per gallon only for motor fuel and undyed diesel fuel purchased in Utah to operate stationary farm engines and self-propelled farm machinery that are used solely for commercial non-highway agricultural use that was taxed at the time of purchase.

Activities that DO NOT qualify for this credit include, but are not limited to, the following: golf courses, horse racing, boat operations, highway seeding, vehicles registered for highway use, hobbies, farming for personal use, etc.

Enter the number of gallons that qualify and we'll calculate the credit for you.

What is the Farm Operation Hand Tools Credit?

There is no form for this credit. Keep all related documents (receipts, invoices, and documents showing amount of sales or use tax paid) with your records.

The refundable credit is allowed for sales and use tax paid on hand tools purchased and used or consumed primarily and directly in a farming operation in Utah. The credit only applies if the purchase price of a tool is more than $250.

If I paid some sales tax on my purchases, do I get credit against use tax for that amount already paid?

If the tax rate in the other state is lower than Utah's rate, the person or consumer must pay the difference. However, you do get a credit against the use tax due for the sales or use tax you have already paid.

For example, if you paid sales tax to a state whose tax rate is lower than the Utah tax rate, when figuring your use tax, you would get a credit for the sales tax you already paid to the other state.

Use the following instructions when figuring your use tax owed:
  1. Total amount of purchases subject to use tax
  2. Use tax rate (found here)
  3. Use tax (multiply line 1 by line 2)
  4. Amount of grocery food purchases subject to use tax
  5. Multiply line 4 by 0.03
  6. Add line 3 and line 5
  7. Credit for sales tax already paid to another state
  8. Use tax due (subtract line 7 from line 6) Enter ZERO if less than ZERO

What if I paid sales tax to more than one state (other than Utah)?

If sales taxes were paid to more than one state, you need to complete the use tax worksheet for each state. You will then enter the sum of the use tax from each worksheet on your tax return.

The worksheet can be found here.

What is my use tax rate?

  • Beaver County .0595
  • Beaver City .0695
  • Box Elder County .0595
  • Brigham City, Perry, Willard .0650
  • Snowville .0695
  • Cache County .0630
  • Cache Valley Transit, Hyde Park, Lewiston, Millville .0655
  • Hyrum, Logan, Nibley, North Logan, Providence, Richmond, River Heights, Smithfield .0660
  • Carbon County .0595
  • Wellington .0625
  • Price .0635
  • Daggett County .0695
  • Davis County .0650
  • Bountiful, Centerville, North Salt Lake, West Bountiful, Woods Cross .0660
  • Duchesne County .0595
  • Duchesne City .0605
  • Roosevelt .0635
  • Emery County .0595
  • Green River .0775
  • Garfield County .0695
  • Boulder, Panguitch, Tropic .0795
  • Bryce Canyon .0805
  • Grand County .0595
  • Moab .0785
  • Iron County .0595
  • Cedar City .0605
  • Brian Head .0795
  • Juab County .0595
  • Santaquin South .0620
  • Nephi .0625
  • Kane County .0695
  • Kanab, Orderville .0795
  • Millard County .0595
  • Morgan County .0595
  • Piute County .0595
  • Rich County .0595
  • Garden City .0755
  • Salt Lake County .0685
  • South Salt Lake .0705
  • Alta .0835
  • San Juan County .0595
  • Blanding, Monticello .0635
  • Sanpete County .0595
  • Ephraim, Fairview, Mount Pleasant .0625
  • Gunnison .0635
  • Sevier County .0595
  • Aurora, Redmond .0605
  • Richfield, Salina .0635
  • Summit County .0605
  • Snyderville Basin Transit .0635
  • Park City .0745
  • Tooele County .0595
  • Erda, Grantsville, Lakepoint, Lincoln, Stansbury Park .0625
  • Tooele City .0635
  • Uintah County .0605
  • Naples, Vernal .0635
  • Utah County .0675
  • Cedar Hills, Orem .0685
  • Wasatch County .0595
  • Heber .0625
  • Independence .0705
  • Midway .0735
  • Park City East .0785
  • Washington County .0595
  • Hurricane, Ivins, La Verkin, St. George, Santa Clara, Washington City .0625
  • Springdale .0755
  • Wayne County .0595
  • Weber County .0685
  • Falcon Hill Riverdale, Riverdale .0705

What is the Untaxed Income of a Resident Trust Addition?

Include any distribution received by a resident beneficiary of a resident trust of income that was taxed at the trust level for federal tax purposes, but was subtracted from state taxable income of the trust.

Can I deduct my railroad retirement income?

Railroad retirement pensions are deductible on the Utah return only to the extent they are taxable on the federal return. If you received pension payments, disability income, or unemployment payments under the Railroad Retirement Act and are required to report all or part of the amount received as taxable income on your federal tax return, you may deduct that amount from Utah income. If amounts derived from sources other than railroad retirement are included in your taxable retirement income, only deduct the railroad retirement amounts reported on these lines.

What state tax refund distributed to me, as a beneficiary of a trust, should I enter?

Enter any state tax refund distributed to a beneficiary of a resident trust to the extent the tax was included in computing federal income of the resident trust for the year.

What is the Medical Savings Account (MSA) Credit?

If you claimed MSA amounts on federal Form 1040, you CANNOT claim MSA amounts on your Utah return. The Utah resident account holder of an MSA should receive a Form TC-675M, Statement of Withholding for Utah Medical Savings Account, from the account administrator. Include 5% of the sum of lines 5 and 6 from Form TC-675M. Keep Form TC-675M with your records.

Contributions to a health savings account (HSA) or a flexible spending account (FSA) do NOT qualify for this credit.

Can I deduct my gains from capital transactions?

A qualified taxpayer may deduct 5% of the short-term and long-term capital gain on a transaction if the following applies:
  • The gain occurs on or after January 1, 2008.
  • At least 70% of the proceeds of the capital gain transaction are used to purchase qualifying stock in a Utah small business corporation within 12 months from when the gain was recognized.
  • The individual did not have an ownership interest in the Utah small business corporation that issued the qualifying stock.
See Utah's website for more information.

Do I qualify for a credit for income tax paid to another state?

A Utah resident or part-year resident whose income is taxed by Utah AND another state(s), the District of Columbia, or a possession of the United States, may be entitled to a credit against Utah income tax for the amount of tax paid to the other state(s).

Only the actual taxes paid on the income taxed by both Utah and the other state qualifies for this credit.

Do not use the state income tax withheld from Form W-2 as the taxes paid to the other state. You must complete and file the other state's return to determine the amount of taxes paid. You may be asked to furnish additional information later to verify this credit.

What is the Renewable Commercial Energy Systems Tax Credit?

This credit is for reasonable costs, including installation, of a commercial energy system that is an active solar system, a direct-use geothermal system, a geothermal heat-pump system, a hydro-energy system, or a passive solar system.

Credit is also allowed for a commercial system that uses wind, geothermal electricity, or biomass equipment.

For more information, contact:
Utah Office of Energy Development (OED)
PO Box 144845
Salt Lake City, UT 84114-4845
telephone 801-538-8718
energy.utah.gov

What is the Mineral Production Withholding Tax Credit?

Enter the total of the mineral production tax withheld as shown on Forms TC-675R or Utah Schedule K-1(s) for the tax year. Retain copies of Form TC-675R or Utah Schedule K-1 with your records. All necessary information will be contained in TC-40W, Part 2.

What are contributions to Cat and Dog Community Spay and Neuter Program used for?

Contributions help fund exempt organizations that operate a qualified clinic of licensed veterinarians who spay and neuter cats and dogs owned by low-income persons. For information, contact:

Utah Department of Agriculture
350 N Redwood Rd
PO Box 146500
Salt Lake City, UT 84114-6500
Phone: 801-538-7165

What are contributions to the School District and Nonprofit School District Foundation used for?

Contributions provide funds to private, nonprofit school district foundations established to promote (1) partnership activities between schools and communities, (2) charitable giving activities to specific educational programs, and (3) opportunities for scientific, educational, literary, and improvement objectives. If the school district does not have a nonprofit foundation, the contribution goes to the school district.

What are the requirements for the Retirement Tax Credit?

For taxpayers age 65 or older: Each taxpayer (you, and/or your spouse if filing jointly) who is age 65 or older at the end of the tax year (or time of death if the taxpayer passed away in 2013) may be entitled to a retirement credit of up to $450. This credit is limited by the total of your modified adjusted gross income, nontaxable interest income, and any additions to income reported on TC-40A, Part 1.

For taxpayers under age 65 who were born before January 1, 1953: Each taxpayer (you, and/or your spouse if filing jointly) who is under age 65 at the end of the tax year and was born before January 1, 1953, and received eligible retirement income, may qualify for a credit up to $288, but not more than 6% of the qualifying income. The credit is limited by the total of your modified adjusted gross income, nontaxable interest income, and any additions to income reported on TC-40A, Part 1. Form TC-40C is used to calculate the allowable credit.

Click here for information about which income does qualify for the credit and here for information about which income doesn't qualify.
NOTE: The Retirement Credit is phased out when modified adjusted gross income exceeds certain amounts based on filing status and shown on line 15 of TC-40C.

What is the Medical Savings Account (MSA)
Addback
?

The account holder of an MSA should receive a Statement of Withholding for Utah Medical Savings Account, Form TC-675M, from the account administrator each year contributions are made. Include the sum of lines 8 and 9 from Form TC-675M but not more than the amount deducted or used to calculate the MSA credit on your Utah tax return. Keep Form TC-675M with your records.

What is the Utah Educational Savings Plan (UESP) Addback?

If an amount is withdrawn from a Utah Educational Savings Plan (UESP) 529 account by the taxpayer, but it is not spent on qualified higher education costs, the withdrawn amount must be added back to income if the amount withdrawn was deducted or was used in calculating the UESP credit on your Utah return in 2013 or on a previously filed return. A UESP account holder should receive Form TC-675H, Statement of Contributions and Disbursements for the Utah Educational Savings Plan, from UESP. Keep this form with your records. If you have any questions about UESP, call 801-321-7188 or 1-800-418-2551, or visit the UESP website.

What is the Reimbursed Adoption Expenses Addition?

Include any adoption expense deducted on your Utah return for a tax year before 2008, for which you received a reimbursement from your insurance company, a public welfare agency, a private charitable organization, or any other source in the current year.

What is the Municipal Bond Interest Addition?

Interest from certain bonds, notes, and other evidences of indebtedness (commonly known as municipal bonds) issued by non-federal governmental entities outside Utah will be subject to Utah's income tax if acquired after January 1, 2003.

However, interest earned on non-Utah municipal bonds is not subject to Utah tax if the issuing state (or political subdivision) does not impose an income tax on bonds issued by Utah, or the issuing state does not impose an income tax.

See details at Utah's website.

What is income that qualifies for the Retirement Tax Credit?

Qualifying income is pensions, annuities, or taxable retirement Social Security benefits. The deduction is limited by adjusted gross income plus nontaxable interest income.

Pensions, annuities, and taxable retirement Social Security benefits that meet the following criteria are considered to be retirement income:

  • Paid from an annuity contract purchased under a plan which has been contributed to by your employer and you can't revoke as provided under Section 404(a)(2) of the Internal Revenue Code
  • Purchased by an employee under a plan which meets the requirements of Section 408 of the Internal Revenue Code (commonly known as IRA plans)
  • Paid by the United States, a state thereof, or the District of Columbia
  • Taxable retirement Social Security benefits (excluding disability and survivor benefits), only if included in your Federal adjusted gross income

What income does NOT qualify for the Retirement Tax Credit?

The following are examples of income that does not qualify for the retirement deduction:
  • Disbursements from deferred compensation plans, such as 401(k) and 457 plans
  • Qualified income, including disability and Social Security survivors benefits, received by a child on behalf of a deceased employee

Can my retirement income be divided between myself and my spouse?

The deduction is only available to the taxpayer who earned the qualifying income. Pensions and annuities of one spouse that qualify as retirement income MAY NOT be divided between both spouses.

What are contributions to the Pamela Atkinson Homeless Account used for?

Contributions will help fund services and programs to help Utahns become self-sufficient. For more information contact:
Housing and Community Development Division
Department of Workforce Services
1385 S State Street
Salt Lake City, UT 84115
Phone: 801-468-0148
or go to housing.utah.gov.

What are contributions to the Kurt Oscarson Children's Organ Transplant Account used for?

Contributions will provide financial help to the families of children needing an organ transplant. For information, contact
The Representative for the Department of Health
PO Box 144610
44 N Mario Capecchi Dr
Salt Lake City, UT 84114
801-584-8239

What are contributions to the Nongame Wildlife Fund used for?

Contributions provide funding to the Utah Division of Wildlife Resources for preservation, protection, perpetuation, and enhancement of nongame wildlife species that are protected, endangered or threatened with extinction. Contact the
Utah Division of Wildlife Resources
1594 W North Temple, Suite 2110
Salt Lake City, UT 84116
801-538-4853
for more information.

What interest from U.S. Government obligations is or is not deductible on my Utah tax return?

Interest earned on U.S. Government obligations issued by an agency or instrumentality of the United States is exempt from state income tax.

U. S. Government obligations include:
  • Treasury bills
  • Treasury notes
  • E, EE, H, HH, and I bonds
Income NOT exempt from Utah state income tax includes:
  • Interest or dividends from the Federal National Mortgage Association (FNMA) and the Government National Mortgage Association (GNMA)
  • Interest on refunds from the IRS or any federal agency
Only interest or dividend income from U.S. Government obligations included in your federal adjusted gross income is exempt from state income tax. Before entering an amount, subtract any related expenses claimed as deductions on your federal return, such as interest expense on money borrowed to purchase bonds or securities, or ordinary and necessary expenses paid or incurred in connection with producing exempt income. Keep all records, forms, and worksheets to support this deduction.

What is the Utah Educational Savings Plan (UESP) Contributions Credit?

Each Utah taxpayer is entitled to a nonrefundable tax credit for contributions to a UESP account during 2013 of up to five percent of $1,840 per beneficiary, equaling $92 per beneficiary. A married couple can deduct up to five percent of $3,680 per beneficiary, equaling $184 per beneficiary, on a Married Filing Jointly return.

The credit is five percent of the total contributions that you made to a UESP account during 2013. The credit does not phase out based on your income. Married couples taking the tax benefits are not required to have separate UESP accounts.

Contributions are reported in Box 1 of Form TC-675H, Statement of Contribution for Utah Educational Savings Plan.

Keep Form TC-675H with your records.

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