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:
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.
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.
The federal standard deduction or itemized deductions, whichever you claimed on your federal return, is used in the calculation of the taxpayer tax credit.
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):
The federal standard deduction for 2012 is:
|Filing Status||Standard Deduction|
|Married Filing Jointly||$11,900|
|Married Filing Separately||$5,950|
|Head of Household||$8,700|
The additional federal standard deduction for each blind or age 65 or over taxpayer is:
|Filing Status||Additional Amount|
|Married Filing Jointly||$1,150|
|Married Filing Separately||$1,150|
|Head of Household||$1,450|
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):
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.
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:
|Filing Status||Base Amount|
|Married Filing Jointly||$26,058|
|Married Filing Separately||$13,029|
|Head of Household||$19,543|
The income for calculating the phase-out is the Utah Taxable Income shown on your Utah TC-40, line 9.
The credit calculation may be summarized as follows:
Any credit in excess of the tax due will not be refunded, and may not be carried back or carried forward.
The credit is claimed on page 1 of the TC-40 tax return and is calculated as follows (line numbers correspond to those on the TC-40:
|Utah Taxpayer Tax Credit Calculation|
|9. Utah Taxable Income||$|
|10. Utah Tax||$|
|11. Exemptions - multiply $2,850 by number of exemptions on line 2e||$|
|12. Federal standard or itemized deductions||$|
|13. Add line 11 and line 12||$|
|14. State and local income tax deducted on Schedule A, line 5||$|
|15. Subtract line 14 from line 13||$|
|16. Initial credit - multiply line 15 by 6% (.06)||$|
|17. Base phase-out amount (see instructions above)||$|
|18. Subtract line 17 from line 9 (do not enter an amount less than zero)||$|
|19. Multiply line 18 by 1.3% (.013)||$|
|20. Subtract line 19 from line 16 (do not enter an amount less than zero)||$|
The amount on line 20 is your Utah taxpayer tax credit.