Table of Contents
Alabama
Kentucky
North Carolina
Arizona
Louisiana
North Dakota
Arkansas
Maine
Ohio
California
Maryland
Oklahoma
Colorado
Massachusetts
Oregon
Connecticut
Michigan
Pennsylvania
Delaware
Minnesota
Rhode Island
District of Columbia
Mississippi
South Carolina
Georgia
Missouri
Tennessee
Hawaii
Montana
Utah
Idaho
Nebraska
Vermont
Illinois
New Hampshire
Virginia
Indiana
New Jersey
West Virginia
Iowa
New Mexico
Wisconsin
Kansas
New York
No Income Tax States—AK,
FL, NV, SD, TX, WA WY
Copyright © 2006 by ATX II, LLC
Utah
www.incometax.utah.gov
Changes for 2005
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Organ Donation Credit. A credit is now allowed of up to $10,000 for qualified expenses incurred
and not reimbursed to a living donor who donates certain live organs for transplanting in another individual.
Special Needs Adoption Credit. To claim this credit, the adoption must now be in Utah. Permanent
custody being awarded to the Utah Division of Child and Family Services is no longer required.
National Guard and Reserves Military Pay. For 2005 only, the first $2,200 of military pay received
by reservists assigned to a unit located in Utah and by Utah Army and Air National Guard members is
exempt from Utah tax.
New Schedule S. Schedule TC-40S is now provided for reporting additions to income, other deductions, non-refundable credits, and refundable credits. The schedule must be attached to Form TC-40 in
order to report any of these items.
Increase in Personal Exemption Deduction. The personal exemption deduction increased from
$2,325 to $2,400.
Forms and Schedules
Form TC-40, Utah Individual Income Tax Return. For use
by all taxpayers.
Schedule TC-40A, Credit for Tax Paid to Another State.
Schedule TC-40B, Retirement Income Exemption/Deduction.
Schedule TC-40C, Non or Part Year Resident Utah Income
Schedule.
Form TC-40D, Disabled Exemption Verification.
Form TC-40LIC, Utah Low-Income Housing Tax Credit
Carryback and/or Carryforward.
Schedule TC-40S, Income Tax Supplemental Schedule.
Form TC-546, Income Tax Prepayment.
Form TC-547, Income Tax Payment Coupon.
Who Must File a Return
Residents
An individual is a resident if he:
(1) Is domiciled in Utah for the entire year, even if temporarily outside Utah for an extended period of time.
(2) Is domiciled in Utah for any period of time during the
taxable year, but only for the duration of that period.
(3) Even though domiciled outside Utah, maintains a permanent place of abode within the state and spends at
least 183 days of the taxable year within Utah. This does
not apply to military personnel or their spouses who are
in Utah on military assignment, unless they are Utah
residents.
A resident is required to file a Utah income tax return if he:
(1) Is required to file a federal income tax return;
(2) Requests a refund of any overpayment of income tax regardless of the amount of gross income; or
(3) Meets the gross income thresholds in the Filing Requirements table.
Filing Requirements
At end of 2005
Marital status at Filing the taxpayer Gross income
the end of 2005: status:
was:
is at least:
Single
Single Under 65
$8,200
65 or older
$9,450
HOH Under 65
$10,500
65 or Older
$11,750
QW
Under 65
$13,200
65 or Older
$14,200
HOH Under 65
$10,500
Married with
65 or Older
$11,750
dependent child,
living apart from
spouse during last
6 months of 2005
Married living
MFJ
Under 65
$16,400
with spouse at end
(both)
of 2005 or up to
65 or older
$17,400
the date spouse
(one spouse)
died
65 or older
(both spouses) $18,400
MFS
Any Age
$3,200
Married, not living MFS or Any Age
$3,200
with spouse at end MFJ
of 2005 or up to
the date spouse
died
Part-Year Residents
An individual is a part-year resident if he is domiciled in
Utah for part of the year and is domiciled outside Utah for
part of the year. A part-year resident must file an income tax
return if he:
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Utah
(1) Is required to file a federal return, and he has received
Utah source income;
(2) Requests a refund of any overpayment of income tax,
regardless of the amount of gross income; or
Residents, Part-Year Residents, and
Non-Residents (Form TC-40)
(3) Meets the gross income thresholds in the Filing Requirements table on p. UT-1, even if he did not file a federal
return.
All income received during a period of Utah residency is taxable in Utah, regardless of the source of that income. In addition, income from Utah sources is taxable in Utah during any
period of non-residency. All taxpayers must use Form TC-40,
Utah Individual Income Tax Return.
Non-Residents
Income
A non-resident is an individual who was not in Utah or was
in Utah for temporary purposes for less than 183 days during
the taxable year. A non-resident is subject to the same filing
requirements as a part-year resident.
Utah begins the taxable income calculation with federal AGI.
Military Personnel
Utah residents who enter military service retain their Utah
residency and still must file a resident income tax return in
Utah on all income, regardless of the source. Non-residents
stationed in Utah solely due to military orders are not subject
to Utah tax on their military pay. All non-residents, however,
are required to file a Utah income tax return if they have
earned income from Utah sources. The spouse of a person
in active military service is generally considered to have the
military person’s domicile and is subject to the same income
tax laws and rules that apply to the military person.
Native Americans
Residents. Native Americans who are domiciled and earn
income in Utah must file a Utah income tax return, unless
they are:
(1) Enrolled members of a Native American tribe or nation
in Utah, who live and work on the reservation on which
they are enrolled; or
(2) Enrolled members of the Ute Tribe who work on the
Uintah and Ouray Reservation and live on land removed
from that reservation under Hagen v. Utah, 510 U.S. 399
(1994).
Non-Residents. Non-resident Native Americans who are
not domiciled on a reservation within Utah, but earn income
from Utah sources, must file a Utah income tax return.
Students
A Utah resident who is a student at a non-Utah school (full
or part-time) is required to file a Utah return and pay tax
on income regardless of the source. A non-resident student
who is attending a Utah school is required to file a Utah
state income tax return and pay Utah tax on income such as
wages, rental income, business income, etc., earned from
Utah sources.
Filing Status
Utah generally requires that taxpayers use the same filing status as they used on their federal return (i.e., single, married
filing jointly (MFJ), married filing separately (MFS), head of
household (HOH), or qualifying widow(er) (QW)). However,
if one spouse is a resident of Utah and the other spouse is a
non-resident, the taxpayer may file as MFS even if he filed
MFJ for federal purposes.
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Adjustments to Income
Additions to Federal AGI. The following additions to federal AGI are required for Utah purposes.
(1) State income tax itemized on 2005 federal Schedule A.
If the taxpayer filed federal Form 1040 and claimed any
income tax paid to Utah, another state, the District of
Columbia, or a possession of the United States as an
itemized deduction on line 5 of federal Schedule A, one
of the following amounts is added to federal AGI:
• If federal AGI is less than or equal to $145,950 (or
$72,975 if MFS), enter the state income tax itemized
from the taxpayer’s federal Schedule A, line 5.
• If federal AGI is greater than $145,950 (or $72,975 if
MFS), the taxpayer must complete the State Income
Tax Worksheet to determine the amount to enter.
State Income Tax Worksheet
1. Add lines 4, 9, 14, 18, 19, 26, and 27
from federal Schedule A........................ $ _________
2. Add lines 4, 13, and 19, plus any
gambling losses included on line 27 of
federal Schedule A ................................ $ _________
3. Subtract worksheet line 2 from line 1.
If the answer is zero, stop here.
Enter the amount from federal Schedule
A, line 5 on line 5 of the taxpayer’s
Utah return ............................................ $ _________
4. Enter the amount from line 28 on
federal Schedule A ................................ $ _________
5. Subtract line 4 from line 1..................... $ _________
6. Subtract line 5 from line 3..................... $ _________
7. Divide line 6 by line 3 (decimal rate) .... $ _________
8. Multiply the amount on line 5 of
federal Schedule A by the rate on line
7. Enter amount here and on line 5 of
the taxpayer’s Utah return...................... $ _________
(2) Lump sum distribution (Code 51). Taxpayers must include lump sum distributions reported on federal Form
4972, Part II, line 6 and Part III, line 10.
(3) State taxes allocated from an estate or trust (Code 52).
If state taxes were allocated to the taxpayer by the fiduciary, include that amount. If a state tax refund was
allocated to the taxpayer by the fiduciary, include that
amount as a negative number.
Utah
(4) Medical Savings Accounts (Code 53). Include the sum
of lines 8 and 9 from Form TC-675M, Statement of Withholding for Utah Medical Savings Account. This addition is only required for Utah residents.
(5) Utah Educational Savings Plan (Code 54). Any amount
of principal refunded to the account holder for which the
account holder received a prior tax deduction must be
added back to income. This amount is shown in box 2
of Form TC-675H, Statement of Contribution for Utah
Education Savings Plan.
(6) Adoption expense reimbursements (Code 55). Include
any adoption expense previously deducted from income
for which the taxpayer received reimbursement from his
insurance company, a public welfare agency, or a private
charitable organization.
(7) Child’s income excluded from parent’s return (Code 56).
A parent who elects to report a child’s interest and dividends on his federal return must add to his Utah income
any child’s income that was excluded from his federal
AGI. The Worksheet for Child’s Income Excluded From
Parent’s Return is used to determine the addition.
Worksheet for Child’s Income Excluded
From Parent’s Return
1. Enter $1,600 or the sum of the child’s
taxable interest, ordinary dividends, and
capital gains distributions (federal Form
8814, line 4), whichever is less .............. $ _________
2. Federal amount not taxed ....................... $
800
3. Subtract line 2 from line 1.
If less than zero, enter zero. Add this
amount to Utah income .......................... $ _________
(8) Municipal bond interest (Code 57). Interest from certain
bonds, notes, and other evidences of indebtedness issued
by non-federal governmental entities outside Utah will
be subject to Utah’s income tax if acquired after January
1, 2003. Interest earned on non-Utah municipal bonds,
however, will not be subject to Utah tax if the state (or
political subdivision) issuing the bonds does not impose
an income tax on bonds issued by Utah.
(9) Untaxed income of a resident trust (Code 60). Include
any distribution received by a resident beneficiary of a
resident trust of income that was taxed at the trust level
for federal tax purposes, but was subtracted from state
taxable income of the trust.
(10) Untaxed income of a non-resident trust (Code 61). Include any distribution received by a resident beneficiary
of a non-resident trust of income that was taxed at the
trust level for federal tax purposes, but was not taxed at
the trust level by any state.
Deductions
Itemized or Standard Deduction. Taxpayers must use the
same deduction (itemized or standard) for Utah as they used
on their federal return.
One-Half of the Federal Tax. Taxpayers may deduct on-half
of the amounts on federal Form 1040, Lines 57 and 60. If
any recapture taxes were reported on federal form 1040, they
must be added to the total of lines 57 and 60.
State Tax Refund Included in Federal Income. Taxpayers
may deduct any state income tax refund they were required
to report on line 10 of federal Form 1040.
Retirement Income Exemption/Deduction. Schedule TC40B, Retirement Income Exemption/Deduction, is used to
determine the amount of the deduction.
(1) Taxpayers age 65 and older. Each individual (the taxpayer and/or the taxpayer’s spouse, if MFJ) who was 65
or older at the end of the tax year is entitled to an income
exemption of $7,500. This exemption is limited by the
amount of the taxpayer’s adjusted gross income plus certain interest income.
(2) Taxpayers under age 65. Each individual (the taxpayer
and/or the taxpayer’s spouse, if MFJ) who was under 65
at the end of the tax year and received retirement income
may qualify for a deduction up to $4,800, but not in excess of the qualifying income.
✔ COMPLIANCE TIP: The taxpayer must attach copies of all Forms 1099R, SSA-1099, TC-40B, and other
documentation to support this deduction.
For purposes of determining this deduction, “retirement
income” includes pensions, annuities, and taxable retirement social security benefits that meet the following criteria:
• Paid from an annuity contract purchased under a plan
that has been contributed to by the taxpayer’s employer
and is not revocable by the taxpayer, as provided under
IRC Section 404(a)(2);
• Purchased by an employee under a plan that meets the
requirements of IRC Section 408 (an IRA plan);
• Paid by the United States, a state thereof, or the District of Columbia;
• Taxable retirement social security benefits (excluding
disability and survivor benefits), but only if included
in the taxpayer’s federal AGI.
The following are examples of income that does not
qualify for the retirement deduction:
• Disbursements from deferred compensation plans,
such as 401K and 457 plans;
• Social security survivors benefits received by a child
on behalf of a deceased employee.
Interest from U.S. Government Obligations (Code 71). Interest on U.S. government obligations issued by an agency or
instrumentality of the United States is exempt from tax. U.S.
government obligations include treasury bills, treasury notes,
and E, EE, H, HH, and I bonds. They do not include interest
or dividends from Fannie Mae and Ginnie Mae, or interest on
refunds from the IRS or any federal agency. The interest or
dividends must have been included in the taxpayer’s federal
AGI to be eligible for the deduction.
Medical Savings Accounts (Code 72). Only Utah residents
may claim this deduction. MSA amounts are reported to the
taxpayer on Form TC-675M, Statement of Withholding For
Utah Medical Savings Account (MSA). The taxpayer may deduct the sum of lines 5 and 6 from Form TC-675M. However,
if the taxpayer claimed MSA amounts on federal Form 1040,
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Utah
he cannot claim MSA amounts as a deduction on his Utah
return.
Utah small business corporation within 12 months from
when the gain was recognized; and
Utah Educational Savings Plan (UESP) Contributions
(Code 73). Each Utah taxpayer is entitled to an income
tax deduction of up to $1,510 per beneficiary for contributions to an UESP account during the tax year. Married
couples may deduct up to $3,020 per beneficiary on a MFJ
return. Contributions are reported to the taxpayer on Form
TC-675H, Statement of Contribution for Utah Educational
Savings Plan.
(3) The individual did not have an ownership interest in the
Utah small business corporation that issued the qualifying stock.
Health Care Insurance Premiums (Code 74). A taxpayer
may deduct the premiums paid by the taxpayer for health care
insurance during the taxable year for the taxpayer, spouse,
and dependents. Premiums that were itemized or otherwise
deducted in determining federal taxable income on the federal return cannot be deducted on the Utah income tax return.
To qualify, the taxpayer or his spouse must not be eligible
to participate in a plan fully or partially funded by an employer or former employer. The deduction my be limited if
the premiums are fully or partially reimbursed or funded by
the federal, state, or an agency, excluding Medicare, or were
previously deducted on the federal return under IRC Sections
125, 162, or 213.
Long-Term Care Insurance Premiums (Code 75). Taxpayers may deduct amounts paid for long-term care insurance
policies during 2005 to the extent the premiums were not
deducted on their federal return.
Adoption Expenses (Code 76). Taxpayers may subtract
qualifying adoption expenses in one of three ways: (a) the
year in which the expenses are paid or incurred; (b) the year
in which the adoption is finalized; or (c) a year in which the
taxpayer may claim the federal adoption credit.
Native American Income (Code 77). An enrolled member
of a Native American tribe in Utah who lives and works on
the reservation on which he is an enrolled member is exempt
from Utah income tax on the reservation income. An enrolled
member of the Ute tribe who works on the Uintah and Ouray
Reservation and lives on land removed from that reservation
under Hagen v. Utah, 510 U.S. 399 (1994), is exempt from
Utah income tax on income earned on the reservation. Such
taxpayers may deduct the amount of reservation income included in their federal AGI.
Railroad Retirement Income (Code 78). Utah does not tax
railroad retirement or disability income received from the
Railroad Retirement Board on Form RRB-1099, unemployment benefits, and sickness benefits. If railroad retirement
income is deducted under the “Retirement Income Exemption/Deduction” (see p. UT-3), it cannot be deducted again on
Form TC-40S. Only railroad retirement income included on
lines 16b and/or 20b of federal Form 1040 can be deducted.
Equitable Adjustments (Code 79). Taxpayers must attach a
schedule or explanation of any other deductions claimed.
Gains on Capital Transactions (Code 81). A qualified taxpayer may deduct the long-term and short-term capital gain
on a transaction if:
(1) The gain occurs on or after January 1, 2003;
(2) At least 70 percent of the proceeds of the capital gain
transaction are used to purchase qualifying stock in a
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Non-Resident Active Duty Military Pay (Code 82). Active
duty military service pay received by a non-resident is not
taxable on the Utah return. Deduct the amount of active duty
military pay included in federal AGI.
National Guard and Reserves Military Pay (Code 83).
If the taxpayer is a member of a U.S. military reserve unit
located in Utah, or a member of the Utah Army National
Guard, he can deduct the first $2,200 of military pay included
in his 2005 federal AGI. If the taxpayer is a member of the
reserves, the deduction is limited to the first $2,200 earned
while assigned to a unit in Utah.
CAUTION: If the taxpayer deducts military pay under
Code 82, he cannot not also claim the same deduction
under Code 83.
Exemptions
The Personal Exemptions table is used to determine the taxpayer’s exemptions.
Personal Exemptions
Exemption
Amount
Taxpayer and spouse*
$2,400 each
Dependents
$2,400 each
Qualified disabled dependents**
$2,400 each
* This cannot be claimed if either the taxpayer or spouse is
claimed as a dependent on someone else’s federal return.
** Taxpayers must complete Form TC-40D, Disabled
Exemption Verification.
If the taxpayer’s federal AGI on line 4 of Form TC-40, Utah
Individual Income Tax Return, exceeds the AGI thresholds
in the Exemption Limitations table, the taxpayer is subject
to a reduced personal exemption amount. If a reduction is
required, the taxpayer must multiply his federal exemption
amount from line 42 on federal Form 1040 by 0.75 to determine his Utah exemption amount.
Exemption Limitations
Filing Status
AGI
MFS
SINGLE
HOH
MJF or QW
$109,475
$145,950
$182,450
$218,950
If the taxpayer’s federal AGI exceeds the AGI thresholds
based on filing status in the Exemption Limitation table and
he claims a special disabled exemption (line 2d, Form TC40), he must complete the High Income Worksheet for Disabled Exemption to determine his Utah exemption amount.
Utah
High Income Worksheet for Disabled Exemption
Tax Rate Schedules
1. Federal form 1040 line 42 × 0.75 = ........ $ ________
Single or MFS
2. Number of exemptions from federal Form
1040, line 6d, or 1040NR, line 7d .............
________
3. Divide line 1 by line 2 ............................ $ ________
Taxable income
Tax is
Of amount
over
$0
-
$863
2.3%
$0
________
$864
-
$1,726
$20.00+3.3%
$863
5. Multiply line 3 by line 4. This is the
taxpayer’s Utah personal exemption
amount. .................................................... $ ________
$1,727
-
$2,588
$48.00+4.2%
$1,726
$2,589
-
$3,450
$85.00+5.2%
$2,588
$3,451
-
$4,313
$129.00+6%
$3,450
Tax Computation
$4,314
- and over
$181.00+7%
$4,313
4. Number of state exemptions ...................
Residents Exempt from Tax. If the taxpayer’s federal AGI is
less than or equal to the sum of the federal standard deduction
and federal exemption(s), he is exempt from Utah income
tax. The Qualification Worksheet for Exemption From Utah
Income Tax is used to determine if the taxpayer qualifies.
Qualification Worksheet for Exemption
From Utah Income Tax
1. Enter the federal AGI from the
federal return ........................................... 1. _________
2. Enter the standard or itemized
deductions taken on the federal return .... 2. _________
MFJ, HOH, or QW
Taxable income
Tax is
Of amount
over
$0
-
$1,726
2.3%
$0
$1,727
-
$3,450
$40.00+3.3%
$1,726
$3,451
-
$5,176
$97.00+4.2%
$3,450
$5,177
-
$6,900
$169.00+5.2%
$5,176
$6,901
-
$8,626
$259.00+6%
$6,900
$8,627
- and over
$362.00+7%
$8,626
4. Enter the smaller of line 2 or line 3 ......... 4. _________
The Utah income tax ratio is determined by dividing Utah
AGI (from Form TC-40C, line 32, Column A) by federal AGI
(from Form TC-40C, line 32, Column B). The taxpayer determines Utah income tax in the same manner as a full-year
resident, and then multiplies that amount by the Utah income
tax ratio to determine part-year resident or non-resident income tax liability.
5. Enter the exemption amount taken on the
federal return (Form 1040, line 41) ......... 5. _________
Credits
3. Enter the standard deduction for the
filing status: Single enter $5,000;
HOH enter $7,300; MFJ and QW enter
$10,000; MFS enter $5,000..................... 3. _________
6. Add lines 4 and 5..................................... 6. _________
7. Subtract line 6 from line 1. If the amount
is less than zero, enter zero ..................... 7. _________
If the amount on line 7 is greater than 0 (zero), calculate the
tax following the instructions for line 16b of Form TC-40.
If the amount on line 7 is 0 (zero), the taxpayer is exempt
from paying Utah income tax.
Residents Subject to Income Tax. Utah tax is based on
Utah taxable income. All taxpayers must use the Tax Rate
Schedules to determine income tax liability.
Part-Year Residents and Non-Residents. Part-year residents and non-residents must use Schedule TC-40C, Non or
Part Year Resident Utah Income Schedule, to calculate tax
liability.
Schedule TC-40C is used to determine the portion of federal
income and adjustments attributable to Utah income and adjustments. The taxpayer reports Utah income and adjustments
in Column A The taxpayer must include all income/loss (1)
earned or received from Utah sources while a non-resident,
and (2) received while a Utah resident. Each adjustment applicable to Utah income is included. The taxpayer reports federal
income and adjustments in Column B.
Non-Refundable Credits. Utah allows the following nonrefundable credits:
(1) At-Home Parent Tax Credit (Code 01). An at-home parent may claim a non-refundable 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, “at-home parent” includes:
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 the following criteria must be
met:
• The child must be 12 months or younger on the last day
of the taxable year for which the credit is claimed.
• The at-home parent must provide full-time care in the
at-home parent’s residence.
• The child must be claimed as a dependent by the athome parent.
• 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, must be $3,000 or less for the
taxable year.
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Utah
• If the at-home parent files a joint return with another
taxpayer, the federal adjusted gross income of both
taxpayers must be $50,000 or less.
(2) Qualified Shelter Workshop Cash Contribution Credit
(Code 02). Cash contributions made within the tax year
to a qualified non-profit rehabilitation sheltered workshop facility operating in Utah for persons with disabilities are eligible for a credit equal to 50 percent of the
total cash contributions, not to exceed $200. Contributions claimed as a credit may not also be claimed as a
charitable deduction.
(3) Renewable Energy Systems Tax Credit (Code 03). To
qualify for this credit, the taxpayer must have installed
or upgraded a renewable energy system, such as solar or
wind generated power system, during the tax period. Energy savings devices, such as insulation, siding, thermal
windows, and high efficiency furnaces do not qualify.
(4) Clean Fuel Vehicle Credit (Code 05). To qualify for this
credit the taxpayer must (a) have purchased a vehicle
that is registered in Utah, had not previously used to
take the credit, and manufactured to use propane, natural gas, or electricity; or (b) purchased and installed
equipment to convert a vehicle registered in Utah to
use propane, natural gas, or electricity. A hybrid vehicle
qualifies only if the same vehicle model is manufactured
without the clean-fuel fueling system and the hybrid vehicle otherwise meets the requirements for a clean fuel
vehicle.
(5) Historic Preservation Credit (Code 06). Only Utah
residents are allowed this credit. The credit is for costs
incurred in connection with qualified rehabilitation of
any residential certified historic building. Unused credits may be carried forward five years as a credit against
Utah tax due.
(6) Enterprise Zone Credit (Code 07). This credit is available for certain businesses that hire new full-time employees, rehabilitate buildings, or meet certain other
requirements in a designated zone. Taxpayers may not
claim this credit or carry this credit forward into a year
that he has claimed the recycling market development
zone (Code 10) or the targeted business income tax
credit (Code 40).
(7) Low-Income Housing Credit (Code 08). This credit is
an amount, determined by the Utah Housing Corporation, for the owners of a low-income housing project
who have also received an allocation of the federal lowincome housing tax credit. Unused credits may be carried back three years or carried forward five years.
(8) Credit for Employers Who Hire Persons with Disabilities
(Code 09). This credit is for employers hiring individuals with disabilities who (a) worked in this state for at
least six months in a taxable year for that employer, and
(b) are paid at least minimum wage by that employer.
(9) Recycling Market Development Zones (Code 10). This
credit is for taxpayers operating in a designated recycling market development zone. A Taxpayer may not
claim this credit or carry this credit forward into a year
that he has claimed the enterprise zone credit (Code 07)
or the targeted business income tax credit (Code 40).
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(10) Tutoring Credit for Disabled Dependents (Code 11).
The credit is equal to 25 percent, up to $100, of the
costs paid by the taxpayer for tutoring each disabled
dependent.
(11) Tax Credit for Increasing Research Activities (Code
12). This credit is for expenses incurred for increasing
qualified research activities in Utah. A qualifying taxpayer may claim the credit in the taxable year immediately following the taxable year for which he qualifies
for the credit.
(12) Tax Credit for Machinery and Equipment Used to Conduct Research (Code 13). The credit is for machinery,
equipment, or both used primarily for conducting qualified research or basic research in Utah for a time period
of not less than 12 consecutive months. A qualifying
taxpayer may claim the credit in the taxable year immediately following the taxable year for which he qualifies
for the credit.
(13) Credit for Income Tax Paid to Another State (Code
17). Residents and part-year residents whose income
is taxed by Utah and another state, the District of Columbia, or a possession of the United States are entitled
to a credit against Utah income tax for the amount of
tax paid to the other state(s). Non-residents are not eligible for this credit. Full-year residents and part-year
residents must attach Schedule TC-40A, Credit for Tax
Paid to Another State. The credit is the lesser of actual
income tax paid to another state or Utah income tax
multiplied by the ratio of federal AGI taxed in the other
state over federal AGI from the federal return.
OBSERVATION: Part-year residents will rarely qualify for this credit, as Utah and other states apportion
income and only tax the income earned while a resident
of that state.
(14) Live Organ Donation Expense Credit (Code 19). A
living donor may claim a credit of up to $10,000 for
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.
Refundable Credits. Utah allows the following refundable
credits:
(1) Targeted Business Income Tax Credit (Code 40). Taxpayers must obtain a certified copy of Form TC-40TB,
Targeted Business Tax Credit. If an individual claims
this credit, the individual may not claim or carry forward an enterprise zone tax credit or recycling market
development zone tax credit.
(2) Special Needs Adoption Credit (Code 41). A taxpayer
who adopts a child with special needs may claim a refundable credit of $1,000 for each child adopted. This
credit may only be claimed in the tax year the court
issues the order granting the adoption and may not be
carried forward or back. To claim this credit, permanent
custody of the child must have been awarded to the Utah
Division of Child and Family Services, and the child
must meet one of the following conditions:
• Be five years of age or older;
• Be under the age of 18 with physical, emotional, or
mental disability; or
Utah
(3)
(4)
(5)
(6)
• Be a member of a sibling group (two or more persons)
placed together for adoption.
Non-Resident Shareholder’s Withholding Tax Credit
(Code 43). This credit is available to part-year residents
and non-residents only. If the taxpayer is non-resident
shareholder of an S corporation, he is entitled to a credit
for the Utah income tax withheld and paid by the S corporation on his behalf. The credit is equal to the taxpayer’s respective share based on ownership as it relates
to other non-resident shareholders and the amount withheld by the S corporation on behalf of the non-resident
shareholders.
Mineral Production Withholding Tax Credit (Code 46).
The credit is equal to the total mineral production tax
withheld as shown on Form TC-675R, Statement of Utah
Tax Withheld on Mineral Production, or federal Schedule K-1(s) for 2005.
Agricultural Off-Highway Gas/Undyed Diesel Tax
Credit (Code 47). The credit is 24.5 cents per gallon
only for motor fuel and undyed diesel fuel purchased
in Utah to operate stationary farm engines and self propelled farm machinery used solely for commercial nonhighway agricultural use that was taxed at the time of
purchase.
Farm Operation Hand Tools (Code 48). A credit is allowed for sales and use tax paid on the purchase of hand
tools that are used or consumed primarily and directly in
a farming operation in Utah. The credit only applies if
the purchase price of a tool is more than $250.
Other Taxes
Tax From Recapture of Credits. Owners of low-income
housing project and other taxpayers, who have taken the lowincome housing credit and disposed of the building or an
ownership interest, must recapture any credits that have reduced their tax liability in a previous year. Form TC-40LIC,
Utah Low-Income Housing Tax Credit Carryback and/or
Carryforward, is used to calculate the tax.
Use Tax. Taxpayers must complete the Worksheet for Computing Use Tax to determine the amount of use tax due. If the
use tax owed exceeds $400, the taxpayer is required to obtain
a sales and use tax license and to pay the use tax on a sales
and use tax return.
Assembly and Mailing of Return
Attachments
Forms W-2, 1099, Etc. Withholding forms must be attached
to middle of the first page of the return on the left hand side.
Utah Schedules. Copies of Forms TC-40A, TC-40B, TC40C, and/or TC-40S must be enclosed (as required).
Federal K-1. If the non-resident shareholder’s tax credit is
claimed, attach a copy of the federal Schedule K-1. No other
federal attachments are required.
Native American Income Deduction. If the Native American income deduction is claimed, the taxpayer must attach
a statement giving the name of the nation or tribe and the
enrolled or census number.
1.
2.
3.
4.
5.
Worksheet For Computing Use Tax
Total amount of purchases subject to use
tax ........................................................... $ ________
Use tax rate (decimal from “Use Tax
Rate Chart” below) ................................. × ________
Use tax (multiply line 1 by line 2).......... $ ________
Credit for sales tax paid to another state $ ________
Use tax due (subtract line 4 from line 3).
Enter zero if less than zero ..................... $ ________
Use Tax Rate Chart (Effective Dec. 31, 2005)
.0600 Beaver County
.0700 Beaver City
.0600 Box Elder County
.0625 Brigham City, Perry,
Willard
.0700 Snowville
.0610 Cache County
.0635 Cache Valley Transit,
Hyde Park, Hyrum,
Logan, Millville,
Nibley, N.Logan,
Providence, Richmond,
River Heights,
Smithfield
.0600 Carbon County
.0625 Price, Wellington
.0600 Daggett County
.0650 Davis County
.0600 Duchesne County
.0625 Roosevelt
.0575 Emery County
.0750 Green River
.0700 Garfield County
.0800 Boulder, Panguitch,
Tropic
.0600 Grand County
.0775 Moab
.0600 Iron County
.0775 Brian Head
.0600 Juab County
.0625 Nephi
.0675 Kane County
.0775 Kanab, Orderville
.0575 Millard County
.0600 Morgan County
.0600 Piute County
.0600 Rich County
.0700 Garden City
.0660 Salt Lake County
.0810 Alta
.0600 San Juan County
.0650 Monticello
.0600 Sanpete County
.0625 Ephraim, Gunnison
.0600 Sevier County
.0625 Richfield, Salina
.0610 Summit County
.0735 Park City
.0635 Snyderville Basin
Transit
.0600 Tooele County
.0625 Erda, Grantsville,
Lakepoint, Lincoln,
Stansbury Park
.0635 Tooele City
.0650 Uintah County
.0675 Vernal
.0600 Utah County
.0625 Alpine, American Fork,
Cedar Hills, Highland,
Lehi, Lindon, Mapleton,
Orem, Payson, Pleasant
Grove, Provo, Provo
Canyon, Salem, Spanish
Fork, Springville
.0600 Wasatch County
.0625 Heber
.0725 Park City East
.0600 Washington County
.0625 Hurricane, Ivins,
La Verkin, St.
George, Santa Clara,
Washington City
.0750 Springdale
.0600 Wayne County
.0660 Weber County
Other Attachments. If any other adjustments are deducted,
the taxpayer must attach a schedule or an explanation. Taxpayers do not have to attach a copy of the other state’s income
tax return if the credit for income taxes paid to another state
is claimed. The taxpayer, however, must keep a copy of the
other state’s return and all related documents.
All States Quick Answers
UT-7
Utah
Payment
Check or Money Order. Checks or money orders must be
made payable to the “Utah State Tax Commission.” Taxpayers must write their social security number, daytime telephone number, and “2005 TC-40” on the check.
Online. Taxpayers may pay any tax due online with a credit
card or with an electronic check (ACH debit) from a checking account. The taxpayer may pay in full or make partial
payments throughout the year. Each online payment is subject to a service fee. To pay online, access PaymentExpress at
paymentexpress.utah.gov.
Mailing Addresses for Returns
If the taxpayer is due a refund, mail the return to:
Utah State Tax Commission
210 North 1950 West
Salt Lake City, Utah 84134-0260
If the taxpayer is making a payment, mail the return to:
Utah State Tax Commission
210 North 1950 West
Salt Lake City, Utah 84134-0266
Mandatory E-Filing
Income tax return preparers who prepare 101 or more Utah
individual income tax returns in any calendar year must file
returns electronically or with 2-D bar codes.
Due Date and Extensions
(Form TC-546)
Utah tax returns are due April 17, 2006.
Utah automatically grants taxpayers a six-month filing extension (i.e., to October 16, 2006). However, taxpayers must
make a prepayment of tax liability by April 17, 2006, equal
to:
(1) 90 percent of the tax due for 2005; or
(2) 100 percent of the taxpayer’s 2004 Utah tax liability.
UT-8
All States Quick Answers
A prepayment may be in the form of withholding, tax credits,
and/or payment made by April 17, 2006, using Form TC-546,
Income Tax Prepayment. Interest will be assessed on unpaid
tax from the filing due date until the tax is paid in full. Penalties may also be assessed.
Form TC-546 must be mailed or delivered to:
Utah State Tax Commission
210 North 1950 West
Salt Lake City, UT 84134-0200
Checks must be made payable to the “Utah State Tax Commission.”
Estimated Tax Payments in 2006
(Form TC-546)
Utah does not require quarterly estimated tax payments from
self-employed workers or individuals who receive other taxable income from which taxes are not withheld. However, to
avoid a penalty during a filing extension period in 2007 (for
the 2006 tax year), see the prepayment rules in “Due Date
and Extensions” above.
State Tax Commission
Contact Information
Website
www.incometax.utah.gov
Email
taxmaster@utah.gov
Taxpayer Assistance
801-297-2200 (Salt Lake City area)
800-662-4335 (outside Salt Lake City area)
Forms Request
801-297-6700 (Salt Lake City area)
800-662-4335; ext. 6700 (outside Salt Lake City area)
General Taxpayer Mailing Address
Utah State Tax Commission
210 North 1950 West
Salt Lake City, Utah 84134