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Category: Utah

Utah Additions to Income

When you include Additions to your Income on the return these entries appear on line 5 of your state return. The TC-40A (attachment) Part 1 shows a breakout of all of your entries.

 

 

Medical Care Savings Account

An MSA account holder should receive a form TC-675M, Statement of Withholding for Utah Medical Savings Account, from the account administrator each year contributions are made. Include the sum of lines 8 and 9 from form TC-675M to the extent the amount was deducted on your Utah return for a tax year before 2008, or was used in calculating the MSA credit on your Utah return after 2007.  

  • Any disbursement of assets from a MSA account pursuant to a filing for protection under 11 U.S.C. Sec. 101 to 1330; and
  • Any amount withdrawn that is not deducted on your federal tax return under IRC Section 220.

Keep Form TC-675M with your records.

 

 

Lump Sum Distribution

The IRS taxes lump sum distributions on form 4972, with the tax on the distribution added to your regular income tax on form 1040. Because the income from the lump sum distribution is not included in federal adjusted gross income, you must add any distribution to Utah additions to income.

Note:  This addition to income only applies if you filed form 4972 with your federal form 1040 for the current year.

 

 

Utah Educational Savings Plan Unqualified Withdrawal (UESP) Addback

If you withdrew an amount from a Utah Educational Savings Plan (UESP) 529 account but did not use it for qualified higher education expenses and the withdrawal did not meet an exception under IRC Section 529(c) or Section 530(d), enter that amount to the extent the amount was deducted or used in calculating the UESP credit on the current or a previously filed Utah tax 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 www.uesp.org.

 

 

 

 

Child's Income Excluded from Parent's Return

Parents who elect to report a child's interest and dividends on their federal return must add to their Utah income any child's income excluded from the parent's federal adjusted gross income. Use the following worksheet to calculate the add back.

 

1. Enter the lesser of federal form 8814, line 4 or line 5....$____________

2. Federal amount not taxed..........................................$__1050__________

3. Subtract line 2 from line 1.If less than zero, enter zero.

Add this amount to Utah income..................................$____________

 

If income for more than one child is reported on the parent's return, complete the calculation above separately for each child using their respective federal form 8814. Total the amounts from line 3 above for each child.

 

Municipal Bond Interest

Enter 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 income tax if acquired on or after January 1, 2003. Do not enter interest earned on non-Utah municipal bonds 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. For more information, visit Municipal Bond Interest.

 

 

Untaxed Income of a Resident Trust

Enter any distribution received by a resident beneficiary of a resident trust if the income was taxed at the trust level for federal tax purposes, but was subtracted from state taxable income of the trust, must be included in Utah additions to income.

 

 

Untaxed Income of a Nonresident Trust

Enter any distribution received by a resident beneficiary of a nonresident trust of undistributed distributable net income realized by the trust on or after January 1, 2004, if such income was taxed at the trust level for federal tax purposes, but was not taxed at the trust level by any state. Undistributed distributable net income is considered to be distributed from the most recently accumulated undistributed distributable net income.

 

 

Equitable Adjustments

Enter any qualified equitable adjustment needed to prevent receiving a double tax benefit.  Attach an explanation of any equitable adjustment reported.