Representative John R. Westwood proposes the following substitute bill:


1     
NONREFUNDABLE RETIREMENT TAX CREDITS

2     
2018 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: John R. Westwood

5     
Senate Sponsor: Todd Weiler

6     

7     LONG TITLE
8     General Description:
9          This bill modifies the Individual Income Tax Act by amending provisions relating to
10     nonrefundable retirement tax credits.
11     Highlighted Provisions:
12          This bill:
13          ▸     repeals the requirement that certain retirees be born on or before a certain date to be
14     eligible for a nonrefundable retirement tax credit; and
15          ▸     makes technical changes.
16     Money Appropriated in this Bill:
17          None
18     Other Special Clauses:
19          This bill provides retrospective operation.
20     Utah Code Sections Affected:
21     AMENDS:
22          59-10-1019, as renumbered and amended by Laws of Utah 2008, Chapter 389
23     

24     Be it enacted by the Legislature of the state of Utah:
25          Section 1. Section 59-10-1019 is amended to read:
26          59-10-1019. Definitions -- Nonrefundable retirement tax credit.
27          (1) As used in this section:
28          (a) "Eligible age 65 or older retiree" means a claimant, regardless of whether that
29     claimant is retired, who[: (i)] is 65 years of age or older[; and].
30          [(ii) was born on or before December 31, 1952.]
31          [(b) (i) "Eligible retirement income" means income received by an eligible under age
32     65 retiree as a pension or annuity if that pension or annuity is:]
33          [(A) paid to the eligible under age 65 retiree or the surviving spouse of an eligible
34     under age 65 retiree; and]
35          [(B) (I) paid from an annuity contract purchased by an employer under a plan that
36     meets the requirements of Section 404(a)(2), Internal Revenue Code;]
37          [(II) purchased by an employee under a plan that meets the requirements of Section
38     408, Internal Revenue Code; or]
39          [(III) paid by:]
40          [(Aa) the United States;]
41          [(Bb) a state or a political subdivision of a state; or]
42          [(Cc) the District of Columbia.]
43          [(ii) "Eligible retirement income" does not include amounts received by the spouse of a
44     living eligible under age 65 retiree because of the eligible under age 65 retiree's having been
45     employed in a community property state.]
46          [(c) "Eligible under age 65 retiree" means a claimant, regardless of whether that
47     claimant is retired, who:]
48          [(i) is younger than 65 years of age;]
49          [(ii) was born on or before December 31, 1952; and]
50          [(iii) has eligible retirement income for the taxable year for which a tax credit is
51     claimed under this section.]
52          [(d)] (b) "Head of household filing status" is as defined in Section 59-10-1018.
53          [(e)] (c) "Joint filing status" is as defined in Section 59-10-1018.
54          [(f)] (d) "Married filing separately status" means a married individual who:
55          (i) does not file a single federal individual income tax return jointly with that married
56     individual's spouse for the taxable year; and
57          (ii) files a single federal individual income tax return for the taxable year.
58          [(g)] (e) "Modified adjusted gross income" means the sum of an eligible age 65 or
59     older retiree's [or eligible under age 65 retiree's]:
60          (i) adjusted gross income for the taxable year for which a tax credit is claimed under
61     this section;
62          (ii) any interest income that is not included in adjusted gross income for the taxable
63     year described in Subsection (1)[(g)](e)(i); and
64          (iii) any addition to adjusted gross income required by Section 59-10-114 for the
65     taxable year described in Subsection (1)[(g)](e)(i).
66          [(h)] (f) "Single filing status" means a single individual who files a single federal
67     individual income tax return for the taxable year.
68          (2) Except as provided in Section 59-10-1002.2 and subject to Subsections (3) through
69     (5)[: (a)], each eligible age 65 or older retiree may claim a nonrefundable tax credit of $450
70     against taxes otherwise due under this part[; or].
71          [(b) each eligible under age 65 retiree may claim a nonrefundable tax credit against
72     taxes otherwise due under this part in an amount equal to the lesser of:]
73          [(i) $288; or]
74          [(ii) the product of:]
75          [(A) the eligible under age 65 retiree's eligible retirement income for the taxable year
76     for which the eligible under age 65 retiree claims a tax credit under this section; and]
77          [(B) 6%.]
78          (3) A tax credit under this section may not be carried forward or carried back.
79          (4) The [sum of the] tax [credits] credit allowed by Subsection (2) claimed on one
80     return filed under this part shall be reduced by $.025 for each dollar by which modified
81     adjusted gross income for purposes of the return exceeds:
82          (a) for a federal individual income tax return that is allowed a married filing separately
83     status, $16,000;
84          (b) for a federal individual income tax return that is allowed a single filing status,
85     $25,000;
86          (c) for a federal individual income tax return that is allowed a head of household filing
87     status, $32,000; or
88          (d) for a return under this chapter that is allowed a joint filing status, $32,000.
89          (5) For purposes of determining the ownership of items of retirement income under this
90     section, common law doctrine shall be applied in all cases even though some items of
91     retirement income may have originated from service or investments in a community property
92     state.
93          Section 2. Retrospective operation.
94          This bill has retrospective operation for a taxable year beginning on or after January 1,
95     2018.