1     
SOCIAL SECURITY TAX CREDIT AMENDMENTS

2     
2023 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Norman K Thurston

5     
Senate Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill modifies income tax credit for social security benefits.
10     Highlighted Provisions:
11          This bill:
12          ▸     establishes a limit on the amount of social security benefit that is eligible for the tax
13     credit; and
14          ▸     removes the income limitations on eligibility for the tax credit.
15     Money Appropriated in this Bill:
16          None
17     Other Special Clauses:
18          This bill provides retrospective operation.
19     Utah Code Sections Affected:
20     AMENDS:
21          59-10-1042, as last amended by Laws of Utah 2022, Chapters 12, 258
22     

23     Be it enacted by the Legislature of the state of Utah:
24          Section 1. Section 59-10-1042 is amended to read:
25          59-10-1042. Nonrefundable tax credit for social security benefits.
26          (1) As used in this section:
27          (a) "Head of household filing status" means the same as that term is defined in Section
28     59-10-1018.
29          (b) "Joint filing status" means the same as that term is defined in Section 59-10-1018.
30          (c) "Married filing separately status" means a married individual who:
31          (i) does not file a single federal individual income tax return jointly with that married
32     individual's spouse for the taxable year; and
33          (ii) files a single federal individual income tax return for the taxable year.
34          [(d) "Modified adjusted gross income" means the sum of the following for a claimant
35     or, if the claimant's return under this chapter is allowed a joint filing status, the claimant and
36     the claimant's spouse:]
37          [(i) adjusted gross income for the taxable year for which a tax credit is claimed under
38     this section;]
39          [(ii) any interest income that is not included in adjusted gross income for the taxable
40     year described in Subsection (1)(d)(i); and]
41          [(iii) any addition to adjusted gross income required by Section 59-10-114 for the
42     taxable year described in Subsection (1)(d)(i).]
43          [(e)] (d) "Single filing status" means a single individual who files a single federal
44     individual income tax return for the taxable year.
45          [(f)] (e) "Social security benefit" means an amount received by a claimant as a monthly
46     benefit in accordance with the Social Security Act, 42 U.S.C. Sec. 401 et seq.
47          (2) (a) Except as provided in Section 59-10-1002.2 and [Subsections (3) and (4), each
48     claimant on a return] Subsection (3), a claimant that receives a social security benefit may
49     claim a nonrefundable tax credit against taxes otherwise due under this part equal to the
50     product of:
51          [(a)] (i) the percentage listed in Subsection 59-10-104(2); and
52          (ii) subject to Subsection (2)(b), the claimant's social security benefit that is included in
53     adjusted gross income on the claimant's federal income tax return for the taxable year.
54          (b) [the claimant's social security benefit that is included in adjusted gross income on
55     the claimant's federal income tax return for the taxable year.] The amount of social security
56     benefit for which a credit may be claimed under this Subsection (2) may not exceed the
57     following dollar amounts per return:
58          (i) $25,000 for a claimant filing under a married filing separately status;
59          (ii) $30,000 for a claimant filing under a single filing status; or
60          (iii) $50,000 for a claimant filing under a head of household filing status or a joint
61     filing status.
62          (3) A claimant may not:
63          (a) carry forward or carry back the amount of a tax credit under this section that
64     exceeds the claimant's tax liability for the taxable year; or
65          (b) claim a tax credit under this section for a taxable year if a tax credit under Section
66     59-10-1019 is claimed on the claimant's return for the same taxable year.
67          [(4) The tax credit allowed by Subsection (2) claimed on a return filed under this part
68     shall be reduced by $.025 for each dollar by which modified adjusted gross income for
69     purposes of the return exceeds:]
70          [(a) for a federal individual income tax return that is allowed a married filing separately
71     status, $31,000;]
72          [(b) for a federal individual income tax return that is allowed a single filing status,
73     $37,000;]
74          [(c) for a federal individual income tax return that is allowed a head of household filing
75     status, $62,000; or]
76          [(d) for a return under this chapter that is allowed a joint filing status, $62,000.]
77          [(5)] (4) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
78     Act, the commission may make rules governing the calculation and method for claiming the tax
79     credit described in this section.
80          Section 2. Retrospective operation.
81          This bill has retrospective operation for a taxable year beginning on or after January 1,
82     2023.