Questions & Answers

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. Utah might ask for additional information later to verify this credit.

You can only take this credit for individual income tax. You cannot take it for sales tax or local taxes. Complete schedule B to see if your income was taxed by both states.

Common Errors when Claiming the Credit for Income Tax Paid to Another State:

  • Claiming the withholding amount on a W-2 as taxes paid to another state.
  • Claiming credit for taxes other than income tax.
  • Claiming the entire amount of tax paid to another state.
  • Part-year residents not prorating correctly on TC-40S.

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