Taxpayer Tax Credit
- General Information
- Personal exemptions
- Standard or itemized deductions
- Phase-out calculation
- Credit calculation summary
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 initial credit is 6 percent of the total of your Utah personal exemption amount plus your federal standard or itemized deduction amount.
- 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 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 2016, the federal exemption amount is $4,050 per exemption, so the Utah exemption amount is $3,038 per exemption (75% of the $4,050 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.
If your federal adjusted gross income (entered on Utah TC-40, line 4) is more than the amount shown below for your filing status, your federal and Utah exemption amounts are limited. If your federal adjusted gross income is more than the amount shown, complete the Exemption Worksheet below to determine your Utah exemption amount to be used to calculate the taxpayer tax credit.
|Federal AGI||Filing Status|
|$311,300||Married Filing Jointly|
|$155,650||Married Filing Separately|
|$285,350||Head of Household|
|Worksheet to Determine Utah Exemption Amount|
1. Federal exemption amount from:
|2. Multiply line 2 by .75 (75%)||$|
|Enter the amount from line 2 on Utah TC-40, line 10|
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
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 $6,300. If you are married filing jointly and did not check a box on line 5, enter $12,600.
The federal standard deduction for 2016 is:
|Filing Status||Standard Deduction|
|Married Filing Jointly||$12,600|
|Married Filing Separately||$6,300|
|Head of Household||$9,300|
The additional federal standard deduction for each blind or age 65 or over taxpayer is:
|Filing Status||Additional Amount|
|Married Filing Jointly||$1,250|
|Married Filing Separately||$1,250|
|Head of Household||$1,550|
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.
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||$27,734|
|Married Filing Separately||$13,867|
|Head of Household||$20,801|
The income for calculating the phase-out is the Utah Taxable Income shown on your Utah TC-40, line 9.
The credit calculation may be summarized as follows:
- Initial Credit – Total the Utah personal exemption amount and the federal standard or itemized deductions (after the adjustment), then multiply by 6%.
- Phase-out Calculation – Reduce Utah taxable income (TC-40, line 9) by the base phase-out amount (TC-40, line 17), then multiply the remainder by 1.3%.
- Taxpayer Tax Credit – Subtract the phase-out amount (step 2) from the initial credit (step 1).
Any credit in excess of the tax due will not be refunded, and may not be carried back or carried forward.
The credit is claimed on page 1 of the TC-40 tax return and is calculated as follows (line numbers correspond to those on the TC-40:
|Utah Taxpayer Tax Credit Calculation|
|9. Utah Taxable Income||$|
|10. Utah Tax||$|
|11. Exemptions – multiply line 2e by $3,038
(If line 4 is over $155,650, use the above worksheet to calculate exemption amount.)
|12. Federal standard or itemized deductions||$|
|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.