UT Apportionable Nonrefundable Credits
Capital Gain Transactions Credit
A qualified taxpayer may claim a credit for the short-term and long-term capital gain on a transaction if:
a. The gain occurs on or after January 1, 2008;
b. At least 70% of the gross proceeds of the capital gain transaction are used to purchase stock in a qualified Utah small business corporation within 12 months from when the gain was recognized; and
c. The individual did not have an ownership interest in the qualified Utah small business corporation at the time of investment.
For more information and detailed definitions, visit the Tax Commission website, Incometax.utah.gov/credits_ capitalgains.php or refer to UC §59-10-1022.
Calculation of Capital Gain Transactions Tax Credit
1) Eligible short-term or long-term capital gain……………$____________
2) Multiply line 1 by .05. This is your credit……………….$____________
Note: Any credit in excess of the tax liability may not be carried back or carried forward.
Utah Educational Savings Plan (UESP) Credit
If you made a qualified investment in a Utah Educational Savings Plan (UESP) account, you may claim a nonrefundable credit against your Utah tax. To qualify, the investment must be made during the taxable year and not have been deducted on your federal return. The credit is 5 percent of the lesser of the investment made during the tax year or $1,650 per individual beneficiary. On a joint return filed by a married couple, the credit is 5 percent of the lesser of the actual investment made during the tax year or $3,300 per beneficiary.
A UESP account holder should receive form TC-675H, Statement of Contributions and Disbursements for the Utah Educational Savings Plan, from UESP. Your allowable credit amount is shown on 1A or line 1B of form TC-675H, whichever applies. Enter this credit amount.
Keep form TC-675H with your records. If you have any questions about UESP, call 801-321-7188 or 1-800-418-2551, or www.uesp.org. Note: Any UESP credit in excess of the tax liability may not be carried back or carried forward.
Medical Care Savings Account (MSA) Credit
If you made a qualified investment in a Medical Care Savings Account (MSA) and did NOT deduct that investment on your federal form 1040, you may use the MSA amounts to calculate your Utah credit.
The Utah resident account holder of an MSA should receive a form TC-675M, Statement of Withholding for Utah Medical Savings Account, from the account administrator. Include the sum of lines 5 and 6 from form TC-675M on line 1 of the calculation below. Keep form TC-675M with your records.
Calculation of Medical Care Savings Account Tax Credit
1) Eligible amount for credit from line 5 & 6 of form TC-675M.........$__________
2) Multiply line 1 by .05. This is your MSA credit.........................$__________
Note: Any Medical Savings Account credit in excess of the tax liability may not be carried back or carried forward.
Retirement Tax Credit
Complete and attach form TC-40C to determine your allowable retirement credit. Enter the calculated credit from line 18 of TC-40C on TC-40A, Part 3, using code 18.
Note: Any retirement credit in excess of the tax liability may not be carried back or carried forward.
A. Taxpayers age 65 or older who were born before January 1, 1953.
Each taxpayer (you, and/or your spouse if filing jointly) who is age 65 or older at the end of the tax year and was born before January 1, 1953, may be entitled to a retirement credit of up to $450. This credit is limited by the total of your modified adjusted gross income, nontaxable interest income, and any additions to income reported on TC-40A, Part 1.
B. Taxpayers under age 65 who were born before January 1, 1953.
Each taxpayer (you, and/or your spouse if filing jointly) who is under age 65 at the end of the tax year and was born before January 1, 1953, and received eligible retirement income, may qualify for a credit up to $288, but not in excess of 6% of the qualifying income. The credit is limited by the total of your modified adjusted gross income, nontaxable interest income, and any additions to income reported on TC-40A, Part 1. Use form TC-40C to calculate the allowable credit.
Qualifying income is pensions, annuities or taxable retirement social security benefits. To claim the credit a taxpayer must have earned the qualifying income. A taxpayer cannot use pension, annuity or social security income of their spouse as qualified income for their credit. The following are considered to be retirement income:
• Amounts paid from an annuity contract purchased under a plan that has been contributed to by your employer and is not revocable by you as provided under Section 404(a)(2) of the Internal Revenue Code;
• Amounts purchased by an employee under a plan that meets the requirements of Section 408 of the Internal Revenue Code (commonly known as IRA plans);
• Amounts paid by the United States, a state thereof, or the District of Columbia; and
• Taxable retirement social security benefits (excluding survivor benefits), only if included in your federal adjusted gross income.
Income that does NOT qualify
• Disbursements from deferred compensation plans, such as 401(k) and 457 plans; and
• Social security survivor benefits received by a child on behalf of a deceased employee.
NOTE: The retirement credit is phased-out when modified adjusted gross income exceeds certain amounts based on filing status and shown on line 15 of TC-40C. When calculating modified adjusted gross income on line 14, do not include any municipal bond interest on line 13 that was reported on TC-40A.