Utah Apportionable Nonrefundable Credits
These credits will appear on the state return (TC-40) on line 24. They will also be broken out in detail on the attached TC-40A Part III.
Apportionable Nonrefundable Credits can reduce your income tax to zero, but cannot result in a refund.
Capital Gain Transactions Credit
You may claim a credit for the short-term and long-term capital gain on a transaction if:
a. The gain occurs on or after January 1, 2008;
b. At least 70% of the gross proceeds of the capital gain transaction are used to purchase stock in a qualified Utah small business corporation within 12 months from when the gain was recognized; and
c. You did not have an ownership interest in the qualified Utah small business corporation at the time of investment.
For more information and detailed definitions, visit the Tax Commission website, http://incometax.utah.gov/credits/capital-gains or refer to UC §59-10-1022.
Note: Any credit that is more than the tax liability may not be carried back or forward.
1. Taxpayers age 65 or older
Each taxpayer (you and/or your spouse, if filing jointly) age 65 or older as of Dec. 31, 2016, may be allowed a retirement credit of up to $450. (If a taxpayer died during the year, the age on the date of death is used to determine if that taxpayer was age 65 or older.) This credit is limited by the total of your modified adjusted gross income, nontaxable interest income, and any additions to income.
2. Taxpayers under age 65, born before Jan. 1, 1953
Each taxpayer (you and/or your spouse, if filing jointly) under age 65 as of Dec. 31, 2016, and born before Jan.
1, 1953, who received qualifying retirement income, may qualify for a credit up to $288, but not more than 6 percent of the qualifying income. The credit is limited by the total of your modified adjusted gross income, nontaxable interest income, and any additions to income reported on TC-40A, Part 1.
Note: The retirement credit is phased-out when modified adjusted gross income exceeds certain amounts based on filing status (shown on TC-40C, line 15). When calculating modified adjusted gross income on line 14, do not include any municipal bond interest on line 13 reported on TC-40A, Part 1, code 5.
Qualifying Retirement Income
Qualifying income is pensions, annuities or taxable retirement Social Security benefi ts. To claim the credit, you must have earned the qualifying income. You cannot use the pension, annuity or Social Security income of your spouse as your qualified income.
Utah Educational Savings Plan (UESP) 529 Plan Credit
If a qualified contribution was made to your Utah Educational Savings Plan (UESP) account, you may claim a nonrefundable credit. To qualify, the contribution must be made during the taxable year and not have been deducted on your federal return. The credit is 5 percent of the lesser of the investment made during the tax year or $1,900 per individual beneficiary, with a maximum credit of $95 per qualified beneficiary. If married filing jointly, the credit is 5% of contributions made (up to $3,800 per beneficiary) during the tax year, with a maximum credit of $190 per beneficiary.
A UESP account holder should receive form TC-675H, Statement of Contributions and Disbursements for the Utah Educational Savings Plan, from UESP. Your allowable credit amount is shown on 1A or line 1B of form TC-675H, whichever applies. Enter this credit amount.
Keep form TC-675H with your records. If you have any questions about UESP, call 801-321-7188 or 1-800-418-2551, or www.uesp.org.
Note: Any UESP credit in excess of the tax liability may not be carried back or carried forward.
Medical Care Savings Account (MSA) Credit
Important note: Very few people qualify for this credit. An MSA is NOT the same as an HSA (Health Savings Account). Read these instructions carefully.
If you made a qualified investment in a Medical Care Savings Account (MSA) and did NOT deduct that investment on your Federal Form 1040, you may use the MSA amounts to calculate your Utah credit. Utah’s Medical Care Savings Account Act allows Utah residents with a qualified MSA to claim a non-refundable tax credit based on the greater of their contributions to the MSA during the tax year (up to $2,000), or the total qualified medical expenses paid during the tax year for the account holder, their spouse and their dependents.
The Utah resident account holder of an MSA should receive a form TC-675M, Statement of Withholding for Utah Medical Savings Account, from the account administrator. Include the sum of lines 5 and 6 from form TC-675M on line 1 of the calculation below. Keep form TC-675M with your records.
Calculation of Medical Care Savings Account Tax Credit:
1. Eligible amount for credit from line 5 & 6 of form TC-675M......$__________
2. Multiply line 1 by .05. This is your MSA credit.....................$________
For additional information, please see the Utah state website about Medical Care Savings Account Tax Credit
Note: Any Medical Savings Account credit in excess of the tax liability may not be carried back or carried forward.
Health Benefit Plan Premiums Tax Credit
Amounts itemized or otherwise deducted in determining federal taxable income, or used to claim a federal credit, cannot be used for this Utah credit. You may claim a credit of 5% of the amount paid for a health benefit plan only if you, your spouse on a joint return, or any dependent claimed on your return is not insured under a health benefit plan maintained and funded in whole or in part by your, your spouse’s or your dependent’s current or former employer, or another person’s employer. You cannot claim this credit if you choose not to participate in a plan maintained and funded by a current or former employer. You also cannot use pre-tax deductions from wages through employer-sponsored programs, such as a cafeteria or flex plan, to claim the credit.
The credit is 5% of amounts paid for health benefit plans (but not self-insurance) less the total of the following:
1. Credit for health insurance costs of eligible individuals (IRC Section 35),
2. Income exclusions for employer-provided coverage under an accident or health plan (IRC Section 106),
3. Cafeteria or employer plans covering all employees who may choose among two or more cash and qualified benefits (IRC Section 125),
4. Trade or business expenses for self-employed individuals up to 100% of premiums paid, but not more than your net business income (IRC Section 162),
5. Medical and dental expenses deducted on federal Schedule A that are more than 7.5% of your federal adjusted gross income (IRC Section 213), and
6. All dental, vision, supplemental health, or Medicare supplemental policies if not part of your health benefit plan.
The maximum credit is:
* $300 for a single taxpayer (including married filing separately, head of household, and qualifying widow(er)) with no dependents,
* $600 for a married couple filing jointly with no dependents,
* $900 for all taxpayers (any filing status) with dependents.
There is no form for this credit. Keep all related documents with your records.
Note: Any credit that is more than the tax liability may not be carried back or forward.
See http://incometax.utah.gov/credits/health-benefit-plans-credit for more information
Qualifying Solar Project Credit
You may claim a credit of 25% of the amount paid to buy one or more solar units from a qualifying political subdivision, up to a maximum credit of $2,000. This is in addition to any other energy credit you claim. A qualifying solar unit is a portion of the electrical output of an active solar project constructed, controlled or owned by a qualifying political subdivision, which generates electricity furnished to and for the benefit of one or more residential units, and is sold to the taxpayer in exchange for a credit on the taxpayer's electric bill.
Note: Any credit that is more than the tax liability or in excess of $2,000 may be carried forward for the next four years.
There is no form for this credit. Keep all related documents with your records. Contact your city or electrical utility provider or refer to UC §59-10-1024 for more information.
For additional information, please see the Utah state website regarding the Qualifying Solar Project.
Gold and Silver Coin Sale Credit
Capital gains recognized on the sale or exchange of gold and silver coins issued by the United States government (referred to as specie legal tender) and reported on an individual or fiduciary federal income tax return are eligible for an apportionable non-refundable credit against Utah tax.
You may also include any gold and silver coin or bullion, other than that issued by the United States, if a court of competent jurisdiction issued a final, unappealable judgment or order determining that Utah may recognize the gold or silver coin or bullion as legal tender in the state, or congress enacts legislation expressly providing that such coin or bullion is legal tender.
To qualify for the credit, all of the following condition must be met:
1. The capital gain transaction must be for the sale or exchange of gold or silver coin issued by the federal government for another form of legal tender;
2. The capital gain transaction must result in a short-term or long-term capital gain §1222) that is reported on Schedule D of your federal individual or fiduciary return;
3. Any eligible capital gain must first be offset by any capital loss recognized for the year for federal purposes from the sale of gold and/or silver coin; and
4. The transaction must be made in taxable years beginning on or after January 1, 2012.
For addition information regarding the Gold and Silver Coin Sale Credit, please click here.