Utah Taxes

Utah does have an income tax. Utah taxable income begins with Federal adjusted gross income, form which itemized deductions (as claimed on the federal income tax return); personal exemptions, and one half of federal taxes are deducted. If you are required to file a federal income tax return, you will likely need to file a Utah return. If you move to Utah, you do not pay Utah taxes on income earned while living in another state. The year you move to Utah, you file as a part-year resident return. Your tax is computed on all of your income as though you were a full-year resident. However, you only pay the amount attributable to the percentage of your income which was actually earned while living in Utah.

Utah’s top income tax rate is 7 percent. This top rate is reached at taxable income of $4,313 for single taxpayers. For married couples and those who qualify for head of household, the top bracket is reached at $8,626.

Retired taxpayers may get an income tax break in Utah. Taxpayers under age 65 can excluded up to $4,800 per person of retirement income (pension, annuities, or taxable Social Security benefits). Taxpayers age 65 or older can exclude $7,500 each of income regardless of its source. Both of these exemption amounts are phased out for higher income taxpayers. Married taxpayers making more than $32, 000 and single taxpayers making more than $25, 000 will lose some or all of these exemptions, depending on their adjusted gross income.

Utah does have state sales tax. It ranges from 5.75 to over 7 percent, depending upon the county and city where the sale takes place. For Washington County the rate is generally 6.25 percent.

You do not pay a tax on your retirement income to the state where you worked when you earned the retirement income. After Dec. 31, 1995, federal law prohibits states from taxing most pension income of their former residents. For 1996 and thereafter, any retirement income you receive from a qualified retirement plan will be taxable to the state where you reside when you receive the distributions and not the state where you worked.

Utah has a property tax. Real estate property taxes average .63 percent of the market value of a primary residence, and approximately 1.15 percent of the market value of second homes or other real estate in the St. George area. They are due by November 30 of each year.

Utah has an inheritance tax. However, it is only imposed to the extent that you are allowed a credit for state taxes on your Federal estate tax return. Essentially, there is no additional tax to pay. If there is no federal estate tax liability there will be no Utah inheritance tax.

This information is general in nature only and is not designed to answer all of the questions which you may have regarding Utah taxes. As always, you should seek the advice of a competent tax advisor with questions about your specific situation. 

Source: Hafen, Buckner, Everett and Graff, PC, 90 E. 200 N. St. George
435-673-6167 or 800-390-9064 * Certified Public Accountants