This document includes House Committee Amendments incorporated into the bill on Mon, Jan 30, 2017 at 11:09 AM by ryoung.
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7 LONG TITLE
8 General Description:
9 This bill provides for an individual income tax credit for certain social security benefits.
10 Highlighted Provisions:
11 This bill:
12 ▸ defines social security benefit;
13 ▸ provides that a claimant may claim a tax credit for certain social security benefits
14 that are included in the claimant's federal adjusted gross income;
15 ▸ provides that a claimant may claim either the retirement tax credit or the tax credit
16 enacted by this bill; and
17 ▸ provides for rulemaking authority.
18 Money Appropriated in this Bill:
19 None
20 Other Special Clauses:
21 None
22 Utah Code Sections Affected:
23 AMENDS:
24 59-10-1002.2, as last amended by Laws of Utah 2016, Chapter 263
25 59-10-1019, as renumbered and amended by Laws of Utah 2008, Chapter 389
26 ENACTS:
27 59-10-1038, Utah Code Annotated 1953
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29 Be it enacted by the Legislature of the state of Utah:
30 Section 1. Section 59-10-1002.2 is amended to read:
31 59-10-1002.2. Apportionment of tax credits.
32 (1) A nonresident individual or a part-year resident individual that claims a tax credit
33 in accordance with Section 59-10-1017, 59-10-1018, 59-10-1019, 59-10-1022, 59-10-1023,
34 59-10-1024, [
35 credit equal to:
36 (a) for a nonresident individual, the product of:
37 (i) the state income tax percentage for the nonresident individual; and
38 (ii) the amount of the tax credit that the nonresident individual would have been
39 allowed to claim but for the apportionment requirements of this section; or
40 (b) for a part-year resident individual, the product of:
41 (i) the state income tax percentage for the part-year resident individual; and
42 (ii) the amount of the tax credit that the part-year resident individual would have been
43 allowed to claim but for the apportionment requirements of this section.
44 (2) A nonresident estate or trust that claims a tax credit in accordance with Section
45 59-10-1017, 59-10-1020, 59-10-1022, 59-10-1024, or 59-10-1028 may only claim an
46 apportioned amount of the tax credit equal to the product of:
47 (a) the state income tax percentage for the nonresident estate or trust; and
48 (b) the amount of the tax credit that the nonresident estate or trust would have been
49 allowed to claim but for the apportionment requirements of this section.
50 Section 2. Section 59-10-1019 is amended to read:
51 59-10-1019. Definitions -- Nonrefundable retirement tax credits.
52 (1) As used in this section:
53 (a) "Eligible age 65 or older retiree" means a claimant, regardless of whether that
54 claimant is retired, who:
55 (i) is 65 years of age or older; and
56 (ii) was born on or before December 31, 1952.
57 (b) (i) "Eligible retirement income" means income received by an eligible under age 65
58 retiree as a pension or annuity if that pension or annuity is:
59 (A) paid to the eligible under age 65 retiree or the surviving spouse of an eligible under
60 age 65 retiree; and
61 (B) (I) paid from an annuity contract purchased by an employer under a plan that meets
62 the requirements of Section 404(a)(2), Internal Revenue Code;
63 (II) purchased by an employee under a plan that meets the requirements of Section 408,
64 Internal Revenue Code; or
65 (III) paid by:
66 (Aa) the United States;
67 (Bb) a state or a political subdivision of a state; or
68 (Cc) the District of Columbia.
69 (ii) "Eligible retirement income" does not include amounts received by the spouse of a
70 living eligible under age 65 retiree because of the eligible under age 65 retiree's having been
71 employed in a community property state.
72 (c) "Eligible under age 65 retiree" means a claimant, regardless of whether that
73 claimant is retired, who:
74 (i) is younger than 65 years of age;
75 (ii) was born on or before December 31, 1952; and
76 (iii) has eligible retirement income for the taxable year for which a tax credit is claimed
77 under this section.
78 (d) "Head of household filing status" is as defined in Section 59-10-1018.
79 (e) "Joint filing status" is as defined in Section 59-10-1018.
80 (f) "Married filing separately status" means a married individual who:
81 (i) does not file a single federal individual income tax return jointly with that married
82 individual's spouse for the taxable year; and
83 (ii) files a single federal individual income tax return for the taxable year.
84 (g) "Modified adjusted gross income" means the sum of an eligible age 65 or older
85 retiree's or eligible under age 65 retiree's:
86 (i) adjusted gross income for the taxable year for which a tax credit is claimed under
87 this section;
88 (ii) any interest income that is not included in adjusted gross income for the taxable
89 year described in Subsection (1)(g)(i); and
90 (iii) any addition to adjusted gross income required by Section 59-10-114 for the
91 taxable year described in Subsection (1)(g)(i).
92 (h) "Single filing status" means a single individual who files a single federal individual
93 income tax return for the taxable year.
94 (2) Except as provided in Section 59-10-1002.2 and Subsection (6) and subject to
95 Subsections (3) through (5):
96 (a) each eligible age 65 or older retiree may claim a nonrefundable tax credit of $450
97 against taxes otherwise due under this part; or
98 (b) each eligible under age 65 retiree may claim a nonrefundable tax credit against
99 taxes otherwise due under this part in an amount equal to the lesser of:
100 (i) $288; or
101 (ii) the product of:
102 (A) the eligible under age 65 retiree's eligible retirement income for the taxable year for
103 which the eligible under age 65 retiree claims a tax credit under this section; and
104 (B) 6%.
105 (3) A tax credit under this section may not be carried forward or carried back.
106 (4) The sum of the tax credits allowed by Subsection (2) claimed on one return filed
107 under this part shall be reduced by $.025 for each dollar by which modified adjusted gross
108 income for purposes of the return exceeds:
109 (a) for a federal individual income tax return that is allowed a married filing separately
110 status, $16,000;
111 (b) for a federal individual income tax return that is allowed a single filing status,
112 $25,000;
113 (c) for a federal individual income tax return that is allowed a head of household filing
114 status, $32,000; or
115 (d) for a return under this chapter that is allowed a joint filing status, $32,000.
116 (5) For purposes of determining the ownership of items of retirement income under this
117 section, common law doctrine shall be applied in all cases even though some items of
118 retirement income may have originated from service or investments in a community property
119 state.
120 (6) If an eligible age 65 or older retiree or an eligible under age 65 retiree qualifies for a
121 tax credit under this section and under Section 59-10-1038, the eligible age 65 or older retiree
122 or eligible under age 65 retiree may claim either the tax credit under this section or the tax
123 credit under Section 59-10-1038.
124 Section 3. Section 59-10-1038 is enacted to read:
125 59-10-1038. Nonrefundable tax credit for social security benefit.
126 (1) As used in this section:
127 (a) "Claimant" means a resident or nonresident individual whose federal adjusted gross
128 income reported on the state individual income tax return consists of at least 50% taxable
129 social security benefit.
130 (b) "Social security benefit" means Ĥ→ [
131 Internal Revenue Code
131a with Social Security Act, 42 U.S.C. Sec. 401 et seq. ←Ĥ .
132 (2) Except as provided in Section 59-10-1002.2, a claimant may claim a nonrefundable
133 tax credit against taxes otherwise due under this part equal to the product of:
134 (a) 5%; and
135 (b) the claimant's taxable social security benefit.
136 (3) A claimant:
137 (a) may not carry forward or carry back a tax credit under this section;
138 (b) may, if the claimant qualifies for a tax credit under this section and Section
139 59-10-1019, claim either the tax credit under this section or the tax credit under Section
140 59-10-1019; and
141 (c) may claim a tax credit under this section for a taxable year beginning on or after
142 January 1, 2018 Ĥ→ , but on or before a taxable year that ends on December 31, 2022 ←Ĥ .
143 (4) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
144 commission may make rules governing the calculation and method for claiming the tax credit
145 described in this section.