Students

• Nonresident students in Utah
• Utah residents attending school out of state
• Get forms from other states
• Also see: IRS – Tax Information For Students (Federal Information)

Nonresident Students in Utah

If you are a nonresident student, you must file two returns – one with Utah and another with your home state.

Report ALL income earned on your Utah return (federal adjusted gross income), not just income from Utah. Compute the Utah ratio (percentage) on form TC-40B. Then use that percentage to calculate Utah tax.

Your resident state may give you credit for tax paid to Utah.

Example 1

A California resident attends the University of Utah. His yearly income is:

$ 2,000 – part-time job in Utah
$ 5,000 – earned in California during summer break
$ 3,000 – federal taxable portion of U of U scholarship
$10,000 – total taxable income (1/2 Utah, 1/2 California)

The student:

1. Enter the entire income, $10,000 on the Utah return.
2. Takes his applicable deductions and calculates Utah tax, as if everything was earned in Utah.
3. Uses form TC-40B to compute the portion of Utah-earned income—50 percent (5,000 divided by 10,000).
4. Multiplies the tax amount by 50 percent (because half of the income is from Utah).
5. Files a California resident return reporting all of the income and claims a credit for the Utah tax paid.

Example 2

An Oregon resident attends the University of Utah. Her yearly earnings are:

$ 2,000 – part-time job in Utah
$ 5,000 – earned in Oregon during summer break
$ 3,000 – taxable portion of Oregon Elks Lodge scholarship
$10,000 – total income

The income is divided as follows:

$8,000 – Oregon
$2,000 – Utah

The $3,000 taxable portion of the scholarship is considered Oregon income. In this case, she would:

1. Enter the entire income, $10,000, on the Utah return.
2. Take her deductions and calculate Utah tax, as if everything was earned in Utah.
3. Compute the portion of Utah-earned income on form TC-40B—20 percent (2,000 divided by 10,000).
4. Multiply the Utah tax amount by 20 percent (because 20 percent of the income is from Utah).
5. File an Oregon resident return reporting all the income and claims a credit for the Utah tax paid.

Utah Residents Attending School Out of State

Utah residents attending non-Utah schools must pay Utah taxes on both income from Utah and income earned in the state where they attend school. Utah residents attending non-Utah schools do not lose their residency when absent from Utah. They must file Utah income tax returns on all income, regardless of source.

You pay tax to another state on income received while attending an out-of-state school, Utah will allow a credit for the tax paid to the other state.

Example 1

A Utah resident attends the University of Arizona. Her income is:

$ 2,000 – part-time job in Arizona
$ 5,000 – earned in Utah during summer break
$ 1,500 – taxable portion of scholarship from Univ. of AZ
$ 8,500 – total income

The income is divided as follows:

$3,500 – Arizona
$5,000 – Utah

The student must file a full-year Utah resident return. If she files and pays taxes to Arizona on the income earned there, she may get a credit on her Utah return for those taxes or the allowable calculated credit (whichever is less). The Arizona portion of her income is 41.18 percent. She files a tax return computing tax on the full $8,500. On TC-40S, she multiplies the Utah tax by .4118 – the Arizona portion of her income – to compute her allowable credit. She must file an Arizona return to qualify for the credit.

Example 2

A Utah resident attends school at Idaho State University. His yearly income is:

$ 3,000 – part-time job in Idaho
$ 5,000 – earned in Utah during summer break
$ 2,000 – taxable portion of scholarship from Utah Elks Lodge
$10,000 – total income

Here is how the income is divided:

$3,000 – Idaho portion
$7,000 – Utah portion

In this case, the student must file a full-year Utah resident return. If he files and pays taxes to Idaho on the $3,000 wages earned there, he may get a credit on his Utah return for those taxes paid or the allowable calculated credit from TC-40S (whichever is less). In this case, the $2,000 taxable portion of the scholarship is not taxed by Idaho because it is from a non-Idaho source. The student's Idaho income is 30 percent of the total. He must file a Utah TC-40 tax return and compute Utah tax on the full $10,000. On TC-40S, he would multiplies the Utah tax by .3000 – the percentage of Idaho income – to computer the allowable credit. He must file an Idaho return to qualify for the credit.

Example 3

A Utah resident attends the University of Nevada. His income is:

$ 2,000 – part-time job in Nevada
$ 5,000 – earned in Utah during summer break
$ 7,000 – total income

He must file a Utah TC-40 tax return and pay Utah tax on the full $7,000. In this case, the student does not get a credit for taxes paid to Nevada because Nevada does not have a state income tax.