Utah offers several nonapportionable refundable credits that may reduce your tax liability and potentially increase your refund.
Unlike nonrefundable credits, refundable credits can generate a refund even when the credit exceeds the amount of Utah tax owed.
These credits generally are not adjusted based on your Utah residency percentage or Utah-source income.
What Credits Are Included in This Section?
Depending on your situation, you may qualify for one or more of the following refundable credits:
- Upper-Tier Pass-Through Entity Withholding Tax Credit
- Renewable Commercial Energy Systems Credit
- Agricultural Off-Highway Gasoline or Undyed Diesel Credit
- Farm Hand Tools Credit
Upper-Tier Pass-Through Entity Withholding Tax Credit
If an upper-tier partnership, LLC, or S corporation paid Utah tax on your behalf, you may be eligible to claim a refundable credit for the tax that was withheld and remitted to Utah.
The amount available is generally reported on Utah Schedule K-1 or other supporting statements issued by the entity.
Renewable Commercial Energy Systems Credit
Taxpayers who install qualifying commercial renewable energy systems may qualify for a refundable credit.
Qualifying systems may include approved:
- Solar energy systems
- Wind energy systems
- Geothermal energy systems
- Other renewable energy technologies approved under Utah law
Keep all certification documents and proof of installation with your tax records.
Agricultural Off-Highway Gasoline or Undyed Diesel Credit
Agricultural producers may qualify for a refundable credit for gasoline or undyed diesel fuel used in qualifying off-highway farming activities.
Examples include fuel used in:
- Tractors
- Combines
- Irrigation equipment
- Other qualifying farm machinery
Fuel used on public roads generally does not qualify.
Farm Hand Tools Credit
Qualifying farmers may be eligible for a refundable credit for certain hand tools purchased and used in farming operations.
Maintain purchase receipts and records showing the tools were used in a qualifying agricultural business.
How Do I Enter Utah Nonapportionable Refundable Credits?
- Navigate to the Utah Return section.
- Select Nonapportionable Refundable Credits.
- Choose the applicable credit type.
- Enter the required credit amount and supporting information.
- Continue through the remainder of the Utah return.
What Records Should I Keep?
Keep documentation supporting any credit claimed, including:
- Utah Schedule K-1s
- Pass-through entity statements
- Credit certificates
- Fuel purchase records
- Equipment and tool receipts
- Renewable energy system documentation
Retain these records with your tax documents in case additional verification is requested.
For a more detailed explanation of these credits, please click here.