Utah Nonapportionable Nonrefundable Credits
Nonapportionable Nonrefundable Credits can reduce your income tax to zero, but cannot result in a refund. The credits appear on line 26 of your TC-40 State Return. The breakout of the credits will be shown on the TC-40A attachment, Part IV.
At-Home Parent Tax Credit
An at-home parent may claim a nonrefundable credit of $100 for each child who is not more than 12 months old on the last day of the taxable year for which the credit is claimed. For purposes of this credit an at-home parent includes a:
• Biological mother or father,
• Stepmother or stepfather,
• Adoptive parents,
• Foster parents,
• Legal guardian, or
• Individuals in whose home the child is placed by a child-placing agency for the purpose of legal adoption.
To qualify for the credit, all of the following criteria must be met:
1. The child must be 12 months or younger on the last day of the taxable year for which the credit is claimed;
2. The at-home parent must provide full-time care in the at-home parent’s residence;
3. The child must be claimed as a dependent on the at-home parent's return;
4. The sum of the at-home parent’s total wages, tips and compensation listed on federal W-2 forms and the gross income on federal Schedule C, Profit or Loss from Business, line 7, or Schedule C-EZ, Net Profit from Business, line 1, must be $3,000 or less for the taxable year; and
5. The federal adjusted gross income shown on line 4 the TC-40 is less than or equal to $50,000.
Note- Any credit that is more than the tax liability may not be carried back or forward.
Clean Fuel Vehicle Credit
This credit is available for the following four conditions: 1) you purchase a new vehicle that meets air quality and fuel economy standards, 2) you purchase a qualified vehicle fueled by compressed natural gas, 3) you purchase equipment to convert a vehicle to run on propane, natural gas, electricity, or other approved fuel; and 4) you purchase equipment to convert a special mobile equipment engine to operate on propane, natural gas, electricity, or other approved fuel. The credit may only be claimed once per vehicle.
Note- Any credit that is more than the tax liability may be carried forward for the next five years. Contact the Division of Air Quality, 150 N 1950 W, PO Box 144820, SLC, UT 84116, telephone 801-536-4000, for additional information.
Historic Preservation Credit
The credit is for costs to restore any residential certified historic building. You must complete form TC-40H with the State Historic Preservation Office certification, verifying that the credit is approved. Keep the form and all related documentation with your records. Contact the State Historic Preservation Office, 300 S Rio Grande St, SLC, UT 84101, telephone 801-533-3500, or http://history.utah.gov/historic_buildings/financial_assistance/to obtain form TC-40H, certification, and additional information.
Enterprise Zone Credit
The Enterprise Zone Credit is available for certain businesses that hire new full-time employees, restore buildings or meet certain other requirements in a designated zone. Indian tribes may apply for enterprise zone designation within an Indian reservation. If you are allocated enterprise zone credit from your ownership in a partnership or S corporation, your credit must be based on your ownership percentage. Any credit that is more than the tax liability may be carried forward for the next three years.
TIP: You may not claim this credit or carry it into the same year the individual claims the recycling market development zone credit or the targeted business income tax credit. Keep all related documents with your records.
Contact the Governor's Office of Economic Development, 324 S State St, Suite 500, SLC, UT 84111, telephone 801-538-8804; or go to http://incometax.utah.gov/credits/enterprise-zones to obtain additional information.
Low-Income Housing Credit
This credit is an amount, determined by the Utah Housing Corporation, for the owners of a low-income housing project who also received an allocation of the federal low-income housing tax credit. When this credit is applicable, the project owner will provide form TC-40TCAC (issued by the Utah Housing Corporation) to the taxpayer. Any credit amount exceeding the tax owed may be carried back three years or carried forward for five consecutive years as a credit against Utah tax due.
Individuals sharing in the credit must obtain form TC-40TCAC, Utah Low-Income Housing Tax Credit Allocation Certification, and complete form TC-40LI, Summary of Utah Low-Income Housing Tax Credit. Any credit that is more than the tax liability may be carried back three years or forward for the next five years. If you are carrying this credit back or forward, you must also complete form TC-40LIC, Utah Low- Income Housing Tax Credit Carryback and/or Carryforward. Keep the forms and all related documents with your records. The building project owner must also complete and attach form TC-40LIS, Credit Share Summary of Low-Income Housing Project, to the return.
Contact Utah Housing Corporation, 2479 S Lake Park Blvd, West Valley City, UT 84120, telephone 801-902-8200, or at www.utahhousingcorp.org, for information.
Recycling Market Development Zone
You may not claim this credit or carry this credit into a year the individual claims the enterprise zone credit or the targeted business income tax credit.
NOTE: The Recycling Market Development Zone Credit is repealed for qualified machinery or equipment purchased or for other qualified expenditures made after June 30, 2010.
The credit is available to individuals and businesses operating in a designated recycling market development zone. Any credit that is more than the tax liability may be carried forward for the next three years.
Complete form TC-40R, Recycling Market Development Zone Tax Credit, with the Governor's Office of Economic Development certification, verifying the credit has been approved. Do not send form TC-40R with your return. Keep the form and all related documents with your records.
Contact the Governor's Office of Economic Development, 324 S State St, Suite 500, SLC, UT 84111, telephone 801-538-8804, http://business.utah.gov/relocate/incentives/incentives-recycling_zones/or for additional information.
Tax Credit for Research Activities in Utah
The credit is equal to:
1. 5% of the taxpayer's qualified expenses for the taxable year incurred for increasing research activities in Utah above a base amount,
2. 5% of certain payments made during the taxable year to a qualified organization increasing basic research in Utah above a base amount, and
3. 7.5% of the taxpayer's qualified research expenses for the taxable year beginning on or after January 1, 2012.
Note: Any credit under 1 or 2 above exceeding the tax owed may be carried forward for the next 14 taxable years as a credit against Utah tax due. Any credit under 3 above may not be carried forward. There is no form for this credit. Keep all related documents with your records.
Tax Credit for Machinery and Equipment Used to Conduct Research (expired for years after 2010)
The credit is equal to:
1. 6% of the cost of machinery and equipment used primarily to conduct qualified research in Utah for not less than 12 or more consecutive months, and
2. 6% of the cost of machinery and equipment donated to a qualified organization and used primarily to conduct basic research in Utah for 12 or more consecutive months.
Any credit exceeding the tax owed may be carried forward for the next 14 taxable years. If machinery or equipment for which this credit was claimed is used for less than 12 consecutive months for qualified research, an amended return must be filed for the year the credit was claimed, the credit deleted from the return, and any increase in tax paid. There is no form for this credit. Keep all related documents with your records.
Live Organ Donation Expenses Credit
A living donor may claim a credit for up to $10,000 of qualified expenses incurred for the donation of human bone marrow, or any part of an intestine, kidney, liver, lung, or pancreas for transplanting in another individual. Qualified expenses are incurred by the taxpayer or dependent for travel, lodging or a "lost wage" and not reimbursed by any person, and the organ was donated by you or a dependent on your return. If qualified, complete form TC-40T, Live Organ Donation Expenses Credit. Do not send form TC-40T with your return. Keep the form and related documents with your records. Any credit that is more than the tax liability may be carried forward for the next five years.
Renewable Residential Energy Systems Tax Credit
This credit is for reasonable costs, including installation, of a residential energy system that supplies energy to a residential unit in Utah. Additional residential energy systems or parts may be claimed in subsequent years as long as the total amount claimed does not exceed $2,000 per residential unit. If the residence is sold to another, who is not a business entity, before claiming the tax credit, the taxpayer may irrevocably transfer to the new owner the right to the tax credit. The principal portion of lease payments for a residential energy system may qualify for the credit if the lessor irrevocably transfers to the new owner the right to the tax credit. Any credit amount exceeding the tax owed may be carried forward for four consecutive years as a credit against Utah tax due.
Form TC-40E, Renewable Residential and Commercial Energy Systems Tax Credits, must be obtained from the Utah Geological Survey with their certification stamp, verifying the credit has been approved and showing the amount of the approved credit. Do not send form TC-40E with your return. Keep the form and all related documents with your records.
For more information, contact the Utah Geological Survey (UGS), 1594 W North Temple, Box 146100, SLC, UT 84114-6100, telephone 801-537-3300, or at http://www.energy.utah.gov/.
Combat Related Death Credit
If you are filing a return on behalf of a military service member who died as a result of military service in a combat zone, you may claim a nonrefundable tax credit equal to the amount of the tax liability on the return attributable to the deceased service member. To qualify for the credit, all of the following conditions must be met:
- The military service member must have been in an active or reserve component of the United States Army, Navy, Air Force, Marine Corps, or Coast Guard;
- The combat related death must have occurred on or after January 1, 2010;
- The death must have occurred while the military service member was serving in a combat zone, or be the result of a wound, disease, or injury incurred while serving in a combat zone; and
- The service must have been on or after the date declared by the President of the United States by Executive Order as a combat zone, and on or before such designation is terminated by the President.
Veteran Employment Tax Credit
A non-refundable credit is available to taxpayers who hire a qualified recently deployed veteran on or after January 1, 2012.
A qualified recently deployed veteran is an individual who was mobilized to active federal military service in an active or reserve component of the United States Armed Forces, and received an honorable or general discharge within the two-year period before the employment begins.
To qualify for the credit, the qualified veteran must meet all of the following conditions:
- Have received an honorable or general discharge within the two-year period before the employment begins;
- Was collecting or was eligible to collect unemployment benefits, or has exhausted their unemployment benefits within the last two years, under Title 35A, Chapter 4 Part 4, Benefits and Eligibility;
- Work for the taxpayer for at least 35 hours per week for not less than 45 of the 52 weeks following the veteran's employment start date.
The credit is claimed beginning in the year the 45 consecutive weeks in paragraph 3 above are met.
|Calculating the Veteran Employment Tax Credit|
|First Year Credit (count all months in the year the 45 week requirement is met)|
|1. Number of months or partial months veteran employed since hiring (1)|
|2. Monthly credit allowable in first year||$200|
|3. First year credit - multiply line 1 by line 2 (maximum $2,400) (2)||$|
|Second Year Credit|
|4. Number of months or partial months veteran employed in second year|
|5. Monthly credit allowable in second year||$400|
|6. Second year credit - multiply line 4 by line 5 (maximum ($4,800)||$|
1. The qualified veteran must work at least 35 hours per week.
2. The credit is taken in the first year in which the veteran was employed 45 consecutive weeks.
Any credit in excess of tax due will not be refunded, but may be carried forward to offset tax for up to five years.
The following documentation for the qualified recently deployed veteran must be retained by the taxpayer to support the credit claimed, and made available to the Tax Commission upon request:
- Veteran's name, last known address, and taxpayer identification or social security number;
- Start date of employment;
- Documentation establishing that the veteran was employed 45 out of the 52 seeks after the date of employment;
- Documentation provided by the recently deployed veteran's military service unit establishing that the veteran is a recently deployed veteran; and
- A signed statement from the Department of Workforce Services that the recently deployed veteran was collecting, was eligible to collect, or exhausted their unemployment benefits within the last two years.