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.
For additional information about the At-Home Parent Tax Credit, please click here.
Qualified Sheltered Workshop Cash Contribution Credit
Charitable contributions claimed on the federal Schedule A cannot be claimed as a credit here.
Cash contributions made during the taxable year to a qualified Utah nonprofit rehabilitation sheltered workshop facility for persons with disabilities are eligible for the credit. Check with the workshop to make sure they have a current Day Training Provider License or Day Support Provider Certificate issued by the Department of Human Services. The credit is the lesser of $200 or 50 percent of the total cash contributions.
There is no form for this credit. Keep all related documents with your records.
For additional information regarding the Workshop Cash Contribution Credit, click here.
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.
For additional information, please click here, or contact:
Division of Air Quality
195 North 1950 West
PO Box 144820
Salt Lake City, UT 84114-4820
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. For access to the form or additional information, please click here.
Carryforward of Pre-2016 Enterprise Zone Credit
This credit has changed significantly effective Jan 1, 2016.
If you claimed this credit on your return for a year before 2016 and the credit was more than the liability for that year, you may carry the excess credit forward through tax year 2018 or until the credit is used up, whichever comes first.
To take this credit for tax years beginning Jan. 1, 2016 you must get a certificate from the Governor’s Office of Economic Development.
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.
For more information contact:
Governor's Offi ce of Economic Development
60 E South Temple, 3rd Floor
Salt Lake City, UT 84111
For additional information regarding this credit, please see http://incometax.utah.gov/credits/enterprise-zones .
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 see http://incometax.utah.gov/credits/low-income-housing, 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.
The credit is available for qualified machinery and equipment purchased and for other qualified expenditures made by persons 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, or see http://incometax.utah.gov/credits/recycling-zones for additional information.
Tax Credit for Increasing 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.
For additional information, please see http://incometax.utah.gov/credits/research-activities.
Carryover of Tax Credit for Machinery and Equipment Used to Conduct Research (expired for taxable years after 2010)
If you claimed a credit on your return for machinery and/or equipment used to conduct research for a year after 1998 and prior to 2011, and the credit was more than the tax liability for the year, you may carry over the excess credit to the next 14 years and use it to offset tax until used up.
For additional information, please see http://incometax.utah.gov/credits/research-activities.
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.
For additional information, please see http://incometax.utah.gov/credits/live-organ-donation.
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, please see http://incometax.utah.gov/credits/renewable-energy-systems
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:
1. 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;
2. The combat related death must have occurred on or after January 1, 2010;
3. 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
4. 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.
For additional information please see, http://incometax.utah.gov/credits/combat .
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:
1. Have received an honorable or general discharge within the two-year period before the employment begins;
2. 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;
3. 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:
1. Veteran's name, last known address, and taxpayer identification or social security number;
2. Start date of employment;
3. Documentation establishing that the veteran was employed 45 out of the 52 seeks after the date of employment;
4. Documentation provided by the recently deployed veteran's military service unit establishing that the veteran is a recently deployed veteran; and
5. 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.
For additional information, please see http://incometax.utah.gov/credits/veteran-employment
Employing Persons Who Are Homeless Credit
You may claim a credit of up to $2,000 for hiring a homeless person if you receive a credit certificate from the Department of Workforce Services. A homeless person is someone whose primary nighttime residence is a permanent housing, permanent supportive, or transitional facility.
Note: Any credit that is more than the tax liability may be carried forward for the next five years.
Achieving a Better Life Experience Program Credit
You may claim a credit for 5 percent of the total qualifi ed contributions you made to an Achieving a Better Life Experience Program account. You must make the contributions during the taxable year and have an itemized statement from the account administrator for these contributions. You may not claim a credit for an amount greater than the federal gift tax exclusion (IRC Section 2503) or an amount already deducted on your federal income tax return.
Note: Any credit that is more than the tax liability may not be carried back or forward.
Credit for Income Tax Paid to Another State
If you are a Utah resident or part-year resident with income that is taxed by Utah and another state(s), the District of Columbia, or a possession of the United States, you may be entitled to a credit for income tax paid to the other state(s). Nonresidents do not qualify for this credit.
Do not use the state income tax withheld from form W-2 as the tax paid to the other state. You must complete and file the other state's return to determine the tax amount paid. You may have to provide additional information later to verify this credit.
Complete and attach form TC-40S, Credit for Income Tax Paid to Another State.