2
3
4
5
6
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 terms;
13 ▸ enacts a tax credit for social security benefits that are included in the claimant's
14 federal adjusted gross income;
15 ▸ provides that an individual who claims the tax credit for social security benefits may
16 not also claim the retirement tax credit;
17 ▸ grants rulemaking authority to the State Tax Commission; and
18 ▸ makes technical and conforming changes.
19 Money Appropriated in this Bill:
20 None
21 Other Special Clauses:
22 This bill provides retrospective operation.
23 Utah Code Sections Affected:
24 AMENDS:
25 59-10-1002.2, as last amended by Laws of Utah 2016, Chapter 263
26 59-10-1019, as renumbered and amended by Laws of Utah 2008, Chapter 389
27 ENACTS:
28 59-10-1041, Utah Code Annotated 1953
29
30 Be it enacted by the Legislature of the state of Utah:
31 Section 1. Section 59-10-1002.2 is amended to read:
32 59-10-1002.2. Apportionment of tax credits.
33 (1) A nonresident individual or a part-year resident individual that claims a tax credit
34 in accordance with Section 59-10-1017, 59-10-1018, 59-10-1019, 59-10-1022, 59-10-1023,
35 59-10-1024, [
36 credit equal to:
37 (a) for a nonresident individual, the product of:
38 (i) the state income tax percentage for the nonresident individual; and
39 (ii) the amount of the tax credit that the nonresident individual would have been
40 allowed to claim but for the apportionment requirements of this section; or
41 (b) for a part-year resident individual, the product of:
42 (i) the state income tax percentage for the part-year resident individual; and
43 (ii) the amount of the tax credit that the part-year resident individual would have been
44 allowed to claim but for the apportionment requirements of this section.
45 (2) A nonresident estate or trust that claims a tax credit in accordance with Section
46 59-10-1017, 59-10-1020, 59-10-1022, 59-10-1024, or 59-10-1028 may only claim an
47 apportioned amount of the tax credit equal to the product of:
48 (a) the state income tax percentage for the nonresident estate or trust; and
49 (b) the amount of the tax credit that the nonresident estate or trust would have been
50 allowed to claim but for the apportionment requirements of this section.
51 Section 2. Section 59-10-1019 is amended to read:
52 59-10-1019. Definitions -- Nonrefundable retirement tax credit.
53 (1) As used in this section:
54 (a) "Eligible over age 65 [
55 that claimant is retired, who:
56 (i) is over 65 years of age [
57 (ii) was born on or before December 31, 1952.
58 [
59
60 [
61
62 [
63
64 [
65
66 [
67 [
68 [
69 [
70 [
71
72
73 [
74
75 [
76 [
77 [
78
79 [
80 [
81 [
82 (i) does not file a single federal individual income tax return jointly with that married
83 individual's spouse for the taxable year; and
84 (ii) files a single federal individual income tax return for the taxable year.
85 [
86 [
87 (i) adjusted gross income for the taxable year for which a tax credit is claimed under
88 this section;
89 (ii) any interest income that is not included in adjusted gross income for the taxable
90 year described in Subsection (1)[
91 (iii) any addition to adjusted gross income required by Section 59-10-114 for the
92 taxable year described in Subsection (1)[
93 [
94 individual income tax return for the taxable year.
95 (2) Except as provided in Section 59-10-1002.2 and Subsection (6) and subject to
96 Subsections (3) through (5)[
97 nonrefundable tax credit of $450 against taxes otherwise due under this part[
98 [
99
100 [
101 [
102 [
103
104 [
105 (3) A tax credit under this section may not be carried forward or carried back.
106 (4) The [
107 return filed under this part shall be reduced by $.025 for each dollar by which modified
108 adjusted gross 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) (a) An eligible over age 65 retiree may not claim a tax credit under this section and
121 a tax credit under Section 59-10-1041.
122 (b) An eligible over age 65 retiree who qualifies for a tax credit under this section and
123 a tax credit under Section 59-10-1041 may elect whether to claim a tax credit under this section
124 or a tax credit under Section 59-10-1041.
125 Section 3. Section 59-10-1041 is enacted to read:
126 59-10-1041. Nonrefundable tax credit for social security benefits.
127 (1) As used in this section:
128 (a) "Head of household filing status" means the same as that term is defined in Section
129 59-10-1018.
130 (b) "Joint filing status" means the same as that term is defined in Section 59-10-1018.
131 (c) "Married filing separately status" means a married individual who:
132 (i) does not file a single federal individual income tax return jointly with that married
133 individual's spouse for the taxable year; and
134 (ii) files a single federal individual income tax return for the taxable year.
135 (d) "Modified adjusted gross income" means the sum of a claimant's:
136 (i) adjusted gross income for the taxable year for which a tax credit is claimed under
137 this section;
138 (ii) any interest income that is not included in adjusted gross income for the taxable
139 year described in Subsection (1)(d)(i); and
140 (iii) any addition to adjusted gross income required by Section 59-10-114 for the
141 taxable year described in Subsection (1)(d)(i).
142 (e) "Single filing status" means a single individual who files a single federal individual
143 income tax return for the taxable year.
144 (f) "Social security benefit" means an amount received by a claimant as a monthly
145 benefit in accordance with the Social Security Act, 42 U.S.C. Sec. 401 et seq.
146 (2) Except as provided in Section 59-10-1002.2, a claimant may claim a nonrefundable
147 tax credit against taxes otherwise due under this part equal to the product of:
148 (a) the percentage listed in Subsection 59-10-104(2); and
149 (b) the claimant's social security benefit that is included in adjusted gross income on
150 the claimant's federal income tax return for the taxable year.
151 (3) (a) A claimant may not:
152 (i) carry forward or carry back a tax credit under this section; or
153 (ii) claim a tax credit under this section and a tax credit under Section 59-10-1019.
154 (b) A claimant who qualifies for a tax credit under this section and a tax credit under
155 Section 59-10-1019 may elect whether to claim a tax credit under this section or a tax credit
156 under Section 59-10-1019.
157 (4) The tax credit allowed by Subsection (2) claimed on a return filed under this part
158 shall be reduced by $.025 for each dollar by which modified adjusted gross income for
159 purposes of the return exceeds:
160 (a) for a federal individual income tax return that is allowed a married filing separately
161 status, $22,500;
162 (b) for a federal individual income tax return that is allowed a single filing status,
163 $30,000;
164 (c) for a federal individual income tax return that is allowed a head of household filing
165 status, $45,000; or
166 (d) for a return under this chapter that is allowed a joint filing status, $45,000.
167 (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
168 commission may make rules governing the calculation and method for claiming the tax credit
169 described in this section.
170 Section 4. Retrospective operation.
171 This bill has retrospective operation for a taxable year beginning on or after January 1,
172 2020.