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Last Updated on November 28, 2012

UC §59-10-1018

You may be allowed a credit against your Utah tax based on the total of your Utah exemptions and adjusted federal itemized deductions or standard deduction. The credit phases out for incomes over a specific amount, based on your filing status.

This credit is calculated in two parts:

1. The initial credit is 6 percent of the total of your Utah personal exemption amount plus your federal standard or itemized deduction amount.
2. The initial credit is then subject to a phase-out when income exceeds certain limits set by law.

The calculation of the taxpayer tax credit appears on the front of the TC-40, Utah Individual Income Tax Return, on lines 11 through 20. No documentation needs to be attached to your Utah return.

Personal Exemptions

Utah allows 75 percent of the personal and dependent exemption amount claimed on your federal return when calculating the taxpayer tax credit (§59-10-1018(2)(b)(i)). For 2012, the federal exemption amount is $3,800 per exemption, so the Utah exemption amount is $2,850 per exemption (75% of the $3,800 federal exemption amount).

Utah also allows an added exemption for a dependent child or adult with a disability. This is in addition to the regular exemption for that dependent. For more information see Exemptions.

Multiply the number of exemptions you claimed in box 2e of your Utah return by $2,850 and enter the result on TC-40, line 11.

Standard or Itemized Deductions

The federal standard deduction or itemized deductions, whichever you claimed on your federal return, is used in the calculation of the taxpayer tax credit.

Federal Standard Deduction for 2012

If you used the standard deduction on your federal return, enter the standard deduction on your Utah TC-40, line 12 for the calculation of the taxpayer tax credit.

Your federal standard deduction is found on your federal form (as shown below):

• Form 1040, line 40
• Form 1040A, line 24
• Form 1040EZ, if you checked either box on line 5 of federal form 1040EZ, enter the amount from line E of the worksheet on the back of form 1040EZ. If you are single and did not check a box on line 5, enter $5,950. If you are married filing jointly and did not check a box on line 5, enter $11,900.

The federal standard deduction for 2012 is:

The additional federal standard deduction for each blind or age 65 or over taxpayer is:

Itemized Deductions

If you itemized your deductions on your federal return, enter the itemized deductions on your Utah TC-40, line 12 for the calculation of the taxpayer tax credit.

Your total federal itemized deductions is found on your federal form (as shown below):

• Form 1040, line 40
• Form 1040NR, line 38
• Form 1040NR-EZ, line 11

Note: Any state or local income taxes deducted on your federal Schedule A and included in your total federal itemized deductions will be subtracted on TC-40, line 14, as these taxes are not allowed in the calculation of the Utah taxpayer tax credit.

Phase-out Calculation

The taxpayer tax credit must be reduced by 1.3% of the income in excess of the following amounts based on your filing status shown on your TC-40, line 1:

The income for calculating the phase-out is the Utah Taxable Income shown on your Utah TC-40, line 9.

Credit Calculation Summary

The credit calculation may be summarized as follows:

1. Initial Credit – Total the Utah personal exemption amount and the federal standard or itemized deductions (after the adjustment), then multiply by 6%.
2. Phase-out Calculation – Reduce Utah taxable income (TC-40, line 9) by the base phase-out amount (TC-40, line 17), then multiply the remainder by 1.3%.
3. Taxpayer Tax Credit – Subtract the phase-out amount (step 2) from the initial credit (step 1).

Any credit in excess of the tax due will not be refunded, and may not be carried back or carried forward.

The credit is claimed on page 1 of the TC-40 tax return and is calculated as follows (line numbers correspond to those on the TC-40:

The amount on line 20 is your Utah taxpayer tax credit.