Federal law does not allow states to tax railroad retirement income, which has been reported on Form RRB 1099 as Tier I or Form RRB 1099-R as Tier II income.
If railroad retirement pensions are used to calculate the retirement income credit on TC-40C, do not deduct under other deductions. Conversely, railroad retirement benefits deducted under "other deductions" cannot be the"retirement income credit." It generally is more beneficial to take the deduction for railroad retirement income instead of the retirement income credit because the latter phases out as income increases.
If you received pension payments under the Railroad Retirement Act and are required to report all or part of the amount received (Tier I, Tier II, or both) as income on federal form 1040 or 1040A, you may deduct that amount from Utah income.
An equitable adjustment is limited to items required to be included in federal adjusted gross income in the current year that were required to be included in the taxable income for Utah purposes only (but not federal purposes) in a prior year.
