H.B.
88
UTAH INCOME TAX AMENDMENTS
House Floor
Amendments
Representative Kory M. Holdaway proposes the following amendments:
1. Page 1, Line 7: After "BOOKLET" insert "; MODIFYING THE AMOUNT OF PERSONAL EXEMPTIONS THAT AN INDIVIDUAL IS REQUIRED TO ADD TO FEDERAL TAXABLE INCOME; AND MAKING TECHNICAL CHANGES"
2. Page 1, Line 8: After line 8 insert:
"AMENDS:
59-10-114 as last amended by Chapters 60, 131, 240 and 282, Laws of Utah 1999"
3. Page 1, Line 17: After line 17 insert:
"Section 2. Section 59-10-114 is amended to read:
59-10-114. Additions to and subtractions from federal taxable income of an individual.
(1) There shall be added to federal taxable income of a resident or nonresident individual:
(a) the amount of any income tax imposed by this or any predecessor Utah individual income tax law and the amount of any income tax imposed by the laws of another state, the District of Columbia, or a possession of the United States, to the extent deducted from federal adjusted gross income, as defined by Section 62, Internal Revenue Code, in determining federal taxable income;
(b) a lump sum distribution allowable as a deduction under Section 402(e)(3), Internal Revenue Code, to the extent deductible under Section 62(a)(8), Internal Revenue Code, in determining federal adjusted gross income;
(c) [
(d) a withdrawal from a medical care savings account and any penalty imposed in the taxable year if:
(i) the taxpayer did not deduct or include the amounts on his federal tax return pursuant to Section 220, Internal Revenue Code; and
(ii) the withdrawal is subject to Subsections 31A-32a-105 (1) and (2); and
(e) the amount refunded to a participant under Title 53B, Chapter 8a, Higher Education Savings Incentive Program, in the year in which the amount is refunded.
(2) There shall be subtracted from federal taxable income of a resident or nonresident individual:
(a) the interest or dividends on obligations or securities of the United States and its possessions or of any authority, commission, or instrumentality of the United States, to the extent includable in gross income for federal income tax purposes but exempt from state income taxes under the laws of the United States, but the amount subtracted under this subsection shall be reduced by any interest on indebtedness incurred or continued to purchase or carry the obligations or securities described in this subsection, and by any expenses incurred in the production of interest or dividend income described in this subsection to the extent that such expenses, including amortizable bond premiums, are deductible in determining federal taxable income;
(b) 1/2 of the net amount of any income tax paid or payable to the United States after all allowable credits, as reported on the United States individual income tax return of the taxpayer for the same taxable year;
(c) the amount of adoption expenses which, for purposes of this subsection, means any actual medical and hospital expenses of the mother of the adopted child which are incident to the child's birth and any welfare agency, child placement service, legal, and other fees or costs relating to the adoption;
(d) amounts received by taxpayers under age 65 as retirement income which, for purposes of this section, means pensions and annuities, paid from an annuity contract purchased by an employer under a plan which meets the requirements of Section 404 (a)(2), Internal Revenue Code, or purchased by an employee under a plan which meets the requirements of Section 408, Internal Revenue Code, or paid by the United States, a state, or political subdivision thereof, or the District of Columbia, to the employee involved or the surviving spouse;
(e) for each taxpayer age 65 or over before the close of the taxable year, a $7,500 personal retirement exemption;
(f) 75% of the amount of the personal exemption, as defined and calculated in the Internal Revenue Code, for each dependent child
with a disability and adult with a disability who is claimed as a
dependent on a taxpayer's return;
(g)
any amount included in federal taxable income that was
received pursuant to any federal law enacted in 1988 to provide
reparation payments, as damages for human suffering, to United
States citizens and resident aliens of Japanese ancestry who were
interned during World War II;
(h)
subject to the limitations of Subsection (3)(e), amounts a
taxpayer pays during the taxable year for health care insurance, as
defined in Title 31A, Chapter 1, General Provisions:
(i) for:
(A)
the taxpayer;
(B)
the taxpayer's spouse; and
(C)
the taxpayer's dependents; and
(ii)
to the extent the taxpayer does not deduct the amounts under
Section 125, 162, or 213, Internal Revenue Code, in determining
federal taxable income for the taxable year;
(i)
except as otherwise provided in this subsection, the amount of a
contribution made in the tax year on behalf of the taxpayer to a
medical care savings account and interest earned on a contribution
to a medical care savings account established pursuant to Title
31A, Chapter 32, Medical Care Savings Account Act, to the extent
the contribution is accepted by the account administrator as
provided in the Medical Care Savings Account Act, and if the
taxpayer did not deduct or include amounts on his federal tax
return pursuant to Section 220, Internal Revenue Code. A
contribution deductible under this subsection may not exceed either
of the following:
(i)
the maximum contribution allowed under the Medical Care
Savings Account Act for the tax year multiplied by two for
taxpayers who file a joint return, if neither spouse is covered by
health care insurance as defined in Section
31A-1-301
or
self-funded plan that covers the other spouse, and each spouse has
a medical care savings account; or
(ii)
the maximum contribution allowed under the Medical Care
Savings Account Act for the tax year for taxpayers:
(A)
who do not file a joint return; or
(B)
who file a joint return, but do not qualify under Subsection
(2)(i)(i); and
(j)
the amount included in federal taxable income that was derived
from money paid by the taxpayer to the program fund under Title
53B, Chapter 8a, Higher Education Savings Incentive Program, not
to exceed amounts determined under Subsection
53B-8a-106
(1)(d)
and investment income earned on participation agreements under
Subsection
53B-8a-106
(1) when used for higher education costs of
the beneficiary; and
(k)
for tax years beginning on or after January 1, 2000, any
amounts paid for premiums on long-term care insurance policies as
defined in Section
31A-22-1402
to the extent the amounts paid for
long-term care insurance were not deducted under Section 213,
Internal Revenue Code, in determining federal taxable income.
(3)
(a)
For purposes of Subsection (2)(d), the amount of retirement
income subtracted for taxpayers under 65 shall be the lesser of the
amount included in federal taxable income, or $4,800, except that:
(i)
for married taxpayers filing joint returns, for each $1 of
adjusted gross income earned over $32,000, the amount of the
retirement income exemption that may be subtracted shall be
reduced by 50 cents;
(ii)
for married taxpayers filing separate returns, for each $1 of
adjusted gross income earned over $16,000, the amount of the
retirement income exemption that may be subtracted shall be
reduced by 50 cents; and
(iii)
for individual taxpayers, for each $1 of adjusted gross income
earned over $25,000, the amount of the retirement income
exemption that may be subtracted shall be reduced by 50 cents.
(b)
For purposes of Subsection (2)(e), the amount of the personal
retirement exemption shall be further reduced according to the
following schedule:
(i)
for married taxpayers filing joint returns, for each $1 of
adjusted gross income earned over $32,000, the amount of the
personal retirement exemption shall be reduced by 50 cents;
(ii)
for married taxpayers filing separate returns, for each $1 of
adjusted gross income earned over $16,000, the amount of the
personal retirement exemption shall be reduced by 50 cents; and
(iii)
for individual taxpayers, for each $1 of adjusted gross income
earned over $25,000, the amount of the personal retirement
exemption shall be reduced by 50 cents.
(c)
For purposes of Subsections (3)(a) and (b), adjusted gross
income shall be calculated by adding to federal adjusted gross
income any interest income not otherwise included in federal
adjusted gross income.
(d)
For purposes of determining ownership of items of retirement
income common law doctrine will be applied in all cases even
though some items may have originated from service or
investments in a community property state. Amounts received by
the spouse of a living retiree because of the retiree's having been
employed in a community property state are not deductible as
retirement income of such spouse.
(e)
For purposes of Subsection (2)(h), a subtraction for an amount
paid for health care insurance as defined in Title 31A, Chapter 1,
General Provisions, is not allowed:
(i)
for an amount that is reimbursed or funded in whole or in part
by the federal government, the state, or an agency or
instrumentality of the federal government or the state; and
(ii)
for a taxpayer who is eligible to participate in a health plan
maintained and funded in whole or in part by the taxpayer's
employer or the taxpayer's spouse's employer.
(4)
(a)
For purposes of Subsection (1)(c) and this Subsection (4), "personal exemptions" means the total number of personal
exemptions a resident or nonresident individual may claim:
(i)
under Section 151, Internal Revenue Code; and
(ii)
for:
(A)
the individual;
(B)
the individual's spouse; and
(C)
the individual's dependents.
(b)
For purposes of Subsection (1)(c), a resident or nonresident individual shall add the following amounts to the individual's
federal taxable income:
(i)
for an individual claiming two or fewer personal exemptions, 20% of the total dollar amount allowed under Section 151, Internal
Revenue Code, for the individual's personal exemptions; or
(ii)
for an individual claiming three or more personal exemptions, 30% of the total dollar amount allowed under Section 151, Internal
Revenue Code, for the individual's personal exemptions.
"