Utah is one of a few states which taxes both Social Security income and withdrawals from retirement accounts. Seniors may qualify for certain retirement tax credits to offset their tax liability. There are some exceptions noted below:
Railroad Benefits
Federal law does not permit states to tax any railroad retirement, disability income, unemployment income and sickness benefits received from the railroad board that is reported on RRB-1099-R. The program will automatically subtract railroad retirement income on the Utah state return.
What about Qualified Retirement Plan Distributions (rare)?
If you received a distribution from a qualified IRC Section 401 retirement plan and it was included in your federal Adjusted Gross Income, you may subtract the amount, if when paid into the plan the amount was:
- Not included in your Federal Adjusted Gross income, and
- Taxed by another state, the District of Columbia, the United States or U.S. possession.
To make this manual entry within the program, go to:
- State Section
- Edit Utah state return
- Begin on Subtractions from Income
- Begin on Subtractions from Income (again)
- Enter amount and select Qualified Retirement Plan Distributions from the drop down menu
- Continue to save