Summary of Codes for the TC-40 Return –
Deductions from Income

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Tax Year
2008	2007	2006	2005	Description	Code
X	X	X	X	Interest from U.S. Government Obligations	71
–	X	X	X	Medical Savings Account (MSA)	72
–	X	X	X	Utah Educational Savings Plan (UESP)	73
–	X	X	X	Health Care Insurance Premiums	74
–	X	X	X	Long-Term Care Insurance Premiums	75
–	X	X	X	Adoption Expenses	76
X	X	X	X	Native American Income (including nation/tribe codes)	77
X	X	X	X	Railroad Retirement	78
X	X	X	X	Equitable Adjustments (other)	79
X	–	–	–	State Tax Refund Included in Federal Income	80
–	X	X	X	Gains on Capital Transactions	81
X	X	X	X	Nonresident Active Duty Military Pay	82
X	X	X	–	State Tax Refund Distributed to Beneficiary of Trust	85

Interest from U.S. Government Obligations (code 71)

UC§59-10-114(2)(a)

Interest earned on U.S. Government obligations issued by a U.S. agency is exempt from state income tax. This includes:

Treasury bills,
Treasury notes, and
E, EE, H, HH and I bonds.

The following income is NOT exempt from Utah state income tax:

Interest or dividends from Federal National Mortgage Association (FNMA) and Government National Mortgage Association (GNMA); and
Interest on IRS or other federal agency refunds.

The instrument qualifies as a U.S. Government obligation if it:

Is a written document,
Bears interest,
Contains a binding promise by the U.S. Government to pay a specific sum on a specific date, and
Has congressional authorization to pledge the U.S.'s full faith and credit promising to pay.

Only interest or dividend income from U.S. Government obligations included in your federal adjusted gross income is exempt from Utah income tax. Before entering an amount, subtract any related interest expense on money borrowed to purchase bonds the obligation or securities.

Keep all records, forms and worksheets to support this deduction.

Native American Income (code 77)

UC§59-10-114(2)(b) and (e)

An enrolled member of a Utah Native American tribe living and working on the reservation where enrolled 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 vs. Utah (510 U.S. 399 (1994)) is exempt from Utah income tax on the reservation-earned income earned.

On TC-40A, Part 2, using code 77, enter the exempt income included in your federal adjusted gross income. Enter your enrollment/census number and a Native/Tribe Code from the list below in the box designating to which nation/tribe you belong.

Native American Nation/Tribe	Code
Confederated Tribes of the Goshute Reservation	1
Navajo Nation Reservation	2
Paiute Indian Tribe of Utah Reservation	3
Skull Valley Bank of Goshute Indians	4
Ute Indian Tribe	5
Other tribe	6

Railroad Retirement (code 78)

UC§59-10-114(2)(d)

Federal law does not allow states to tax railroad retirement or disability income received from the Railroad Retirement Board on form RRB-1099. States also cannot tax unemployment and sickness benefits from this source. If you use a railroad retirement pension from this form to calculate the retirement credit on form TC-40C for a taxpayer under age 65, do not deduct the amounts again on TC-40A, Part 2.

Railroad retirement pensions are deductible on the Utah return as much as is taxable on the federal return. If you received pension payments, disability income or unemployment payments under the Railroad Retirement Act and must report all or part of the amount received as income on federal form 1040 lines 16b or 20b (or federal form 1040A lines 12b or 14b), you may deduct that amount from Utah income. If amounts from sources besides railroad retirement are included on federal form 1040 lines 16b or 20b (or federal form 1040A lines 12b or 14b), only deduct the railroad retirement amounts.

Equitable Adjustments (other) (code 79)

UC§59-10-115(1)

Enter any qualified equitable adjustment needed to prevent a double tax benefit or detriment. Attach a schedule or explanation of any equitable adjustments claimed.

State Tax Refund (code 80)

UC§59-10-114(2)(c)

If you itemized your deductions on your 2007 federal form 1040, you may deduct the amount reported on your 2008 federal form 1040, line 10.

Nonresident Active Duty Military Pay (code 82)

UC§59-10-103(1)(l)

Active duty military service pay received by a nonresident is not taxable on the Utah return. The amount of active duty military pay included in federal adjusted gross income should be deducted on TC-40A, Part 2, using code 82. Also, see instructions for line 30 on TC-40B and Pub 57.

State Tax Refund Distributed to Beneficiary of Trust (code 85)