Tool | November 2017

State-by-State Guide to Taxes on Retirees


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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 2.15% as well; the combined average rate is 6.77%, according to the Tax Foundation. Groceries are taxed at 3%.

Income Tax Range

Utah has a flat tax of 5%. Taxpayers are exempt from Utah individual income tax if their federal adjusted gross income is less than or equal to the sum of their federal standard deduction (excluding the extra deduction amounts for taxpayers 65 and older or for blindness) plus their federal exemption amount.

Effective income tax rate: 4.7% single/ 5.0% married.

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.


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.