Tool | November 2018

State-by-State Guide to Taxes on Retirees

Utah

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The Bottom Line
Map of Utah

Least Tax-Friendly

One of Kiplinger's top ten least tax-friendly states for retirees, the Beehive State moved to a 5% flat income tax system in 2008. It is one of the minority of states that taxes Social Security benefits. Utah provides a small retirement-income tax credit that may help offset the tax on Social Security for certain income-eligible seniors.

State Sales Tax

State levy is 5.95%, including a 2.15% tax that goes to local governments. Localities can add up to an additional 2.65% as well; the average combined rate is 6.78%, according to the Tax Foundation. Groceries are taxed at 3%.

Income Tax Range

Utah has a flat tax of 4.95%.

Social Security

Social Security benefits are taxed. Benefits may qualify for the retirement-income tax credit described below.

Exemptions for Other Retirement Income

Residents 65 and older may be able to claim a retirement-income tax credit of up to $450 per person ($900 per married couple), subject to income-eligibility limits. Taxpayers younger than 65 can claim a nonrefundable tax credit of up to 6% of eligible retirement income or $288, whichever is less. The credit is phased out at 2.5 cents per dollar of modified AGI over $16,000 for married individuals filing separately, $25,000 for singles and $32,000 for married people filing jointly.

IRAs

Qualifies for the retirement-income tax credit.

401(k)s and Other Defined-Contribution Employer Retirement Plans

Does not qualify for the retirement-income tax credit.

Private Pensions

Qualifies for the retirement-income tax credit.

Public Pensions

Qualifies for the retirement-income tax credit.

Property Taxes

The median property tax on Utah's median home value of $223,200 is $1,480.

Tax breaks for seniors: For 2016, homeowners and renters 66 and older (and surviving spouses of any age) who earned $31,845 or less in 2015 can get a "circuit breaker" tax credit that permits an abatement of 50% of the property taxes due, up to $943. For renters, the amount of relief received is also based on the percentage of rent paid. Homeowners and mobile-home owners get an additional credit equal to the tax on 20% of their property's fair market value. Homeowners who qualify for the circuit breaker generally also qualify for an indigent abatement or deferral; those younger than 65 who have a disability or extreme hardship may also qualify.

Vehicle Taxes

Sales tax is due on purchases. A tax based on a passenger vehicle’s age is due on registration.

Inheritance and Estate Taxes

There is no inheritance tax or estate tax.

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