What's New for 2008 Tax Year

• New Tax System: Utah individual tax law was changed for 2008. The dual tax calculation system used in 2007 no longer applies (using the lower of the 5.35% rate or the graduated tax rates).
• Single-Rate Tax: The 2008 Utah tax rate is 5%.
• Deductions Repealed: These deductions are no longer available:
  • One-half the federal tax,
  • Disabled dependent exemption,
  • Adoption expenses,
  • Health insurance premiums, and
  • Long-term care insurance premiums.
• New Credits: These deductions have changed to nonrefundable credits:
  • Personal exemptions (not disabled dependent exemption),
  • Standard or itemized deductions (now used to calculate the taxpayer tax credit),
  • The Utah Educational Savings Plan (UESP) contributions credit,
  • The Medical Care Savings Plan (MSA) contributions credit,
  • The retirement credit, and
  • The capital gain transactions credit.
• New Withholding Tax Form: There is a new Utah form, TC-40W, used to report your Utah withholding tax from forms W-2, 1099, TC-675R, and a Schedule K-1 (for a nonresident shareholder). You will no longer attach withholding tax forms to your Utah return. Not completing the TC-40W may result in processing delays or the credit being disallowed.
• Utah Forms Renumbered: These Utah forms have been re-numbered:
  • The Income Tax Supplemental Schedule is now TC-40A (formerly TC-40S).
  • The Credit for Income Tax Paid to Another State is now TC-40S (formerly TC-40A).
  • The Non and Part-year Resident Utah Income Schedule is now TC-40B (formerly TC-40C).
  • The new retirement tax credit is on form TC-40C.
• Interest Rate: The interest rate for the 2009 calendar year is 5 percent. Click here for more information. You can also see previous year interest rates in Publication 58.
• Research Credits: Calculating the credit for increasing research activities in Utah and for machinery and equipment used to further research has changed. Also, you may now use these credits in the year you paid the costs instead of the year after.