If a military service member dies as a result of military service in a combat zone, they may be entitled to a nonrefundable tax credit on their TC-40, Utah Individual Income Tax Return. If a fiduciary is filing a trust return on behalf of the deceased service member, the credit is claimed on their TC-41, Utah Fiduciary Income Tax Return.
To qualify for the credit, all of the following conditions must be met:
Combat zone means an area the President of the United States designates by Executive Order in which an active component or reserve component of the United States Armed Forces are or have engaged in combat.
Military service in a combat zone means service in an active component or reserve component of the United States Armed Forces, and which service was performed:
Reserve component of the United States Armed Forces means service in a reserve component of the armed forces listed in 10 U.S.C. Section 101(c) or 10 U.S.C. Section 10101.
The Combat Related Death Credit is equal to the tax liability of the military service member in the year the military service member dies.
|Combat Related Death Tax Credit Calculation
|1. Adjusted gross income on the joint federal return||$|
|2. Federal adjusted gross income of deceased military service member only||$|
|3. Allocation percentage - divide line 2 by line 1 (carry to 4 decimal places)||__.__ __ __ __|
|4. Amount of tax liability from TC-40, line 22||$|
|5. Combat Related Death Credit - multiply line 4 by line 3||$|
Enter the credit from line 5 above on TC-40A, Part 4, using code 25.
Note: You may use a different method of allocating the tax liability if that method more accurately reflects the deceased service member’s tax liability.
The Combat Related Death Credit was passed by the 2011 Legislature but made retroactive for taxable years beginning on or after January 1, 2010. If a Utah return for which the credit is allowed has already been filed for 2010, an amended return would need to be filed to claim the credit. Click here for instructions on filing an amended return.