Utah Refundable Credits
Renewable Commercial Energy Systems- Code 39
Utah taxpayers may claim a refundable tax credit for the reasonable costs, including installation, of a commercial energy system that supplies energy required for a Utah commercial unit, building or structure the taxpayer uses to transact business or a commercial enterprise that produces electrical, mechanical or thermal energy for sale.
A commercial energy system is any active solar, passive solar, geothermal electricity, direct-use geothermal, geothermal heat-pump system, wind, hydro-energy, or biomass system used to supply energy to a commercial unit or as a commercial enterprise.
The Utah tax credit is in addition to any credit under federal law to which you may be entitled.
Get form TC-40E, Renewable Residential and Commercial Energy Systems Tax Credits, from the Governor’s Office of Energy Development with their certification stamp. verifying the credit is approved and showing the amount of the approved credit. Keep this form and all related documents with your records.
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Targeted Business Income Tax Credit- Code 40
A refundable credit is available to businesses providing a community investment project that includes one or more of the following criteria in addition to the normal operations of the business:
- Substantial new employment;
- New capital development; or
- A combination of substantial new employment and new capital development.
A business applicant claiming this credit must file an application with the local zone administrator by June 1 of the tax year.
The business applicant must:
- Be located in an enterprise zone and a county with a population of less than 25,000, and an unemployment rate at least one percentage point higher than the state average for six months or more of each calendar year;
- Have a facility located in the enterprise zone and in which at least 51% of the employees reside;
- Provide a community investment project within the enterprise zone, and a portion of the community investment project during each taxable year for which the credit is claimed; and
- Not be engaged in construction, retail trade or public utility activities.
Note- You may not claim this credit the same year you claim the enterprise zone tax credit (nonapportionable nonrefundable credit, code 07) or the recycling market development zone tax credit (nonapportionable nonrefundable credit, code 10).
When claiming the credit, complete form TC-40TB, Targeted Business Tax Credit, certified by the Governor’s Office of Economic Development.
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Special Needs Adoption Credit – Code 41
You may claim a refundable credit of $1,000 for a special needs child you adopt for whom the adoption order was issued by a court of competent jurisdiction in Utah or another state, or a foreign country. You are required to be a resident of Utah on the date the order is issued. If the adoption is made by a foreign country, the adoption must be registered in accordance with UC section 78B-6-142
To claim this credit, the child must meet one of the following conditions:
1. be five years of age or older;
2. be under the age of 18 with a physical, emotional, or mental disability; or
3. be part of a sibling group (two or more persons) placed together for adoption.
Note: There is no form for this credit. Keep all related documents with your records.
The credit may not exceed $1,000 per taxable year, regardless of the number of qualifying special needs children adopted during the year.
Agricultural Off-highway Gas/Undyed Diesel Credit- Code 47
Farmers and ranchers may claim a refundable tax credit on their Utah tax returns for Utah fuels tax paid during the tax year for gasoline and undyed diesel fuel used exclusively for commercial, non-highway agricultural use.
This credit is limited to gasoline or undyed diesel fuel used in stationary or self-propelled farm machinery used solely for non-highway (not on public roads) agricultural purposes.
The current Utah gasoline and diesel fuel tax rate is 29.4 cents per gallon.
The refundable tax credit is limited to those involved in commercial farming activities:
- producing agricultural crops for resale,
- raising livestock and other animals useful to man, or
- performing custom agricultural work using non-highway farm equipment.
Activities that do not qualify for this credit include golf courses, horse racing, boat operations, highway seeding, vehicles registered for highway use, hobbies, farming for personal use, and other non-agricultural use.
The credit is not allowed for purchases of fuel used in any vehicle registered for highway use, or for dyed diesel fuel (dyed diesel fuel purchases are exempt from fuel tax).
Credit calculation: Gallons _______ x .294 = Credit _________ **The TaxSlayer program will make this calculation for you so please enter 100% of the expenses and allow our program to make the necessary calculation for the allowable credit.
There is no form for this credit. Keep all related documents with your records.
Farm Operation Hand Tools Credit- code 48
A refundable credit is allowed for sales and use tax paid on hand tools:
- purchased during the tax year, and
- used or consumed primarily and directly in a farming operation in Utah.
Important: The credit applies only if the unit purchase price of the tool is more than $250.
There is no form for this credit. Documentation in the form of a receipt, invoice, or similar document showing the amount of sales or use tax paid must be retained with your records and may be required by the Tax Commission for verification of the credit claimed. You may also be required by the Tax Commission to provide a copy of your federal Schedule F, Farm Income or Loss.