State-by-State Guide to Taxes on Retirees
Tool | December 2020

Utah State Tax Guide for Retirees

State tax rates and rules for income, sales, property, estate, and other taxes that impact retirees.

Utah

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The Bottom Line
Flag of Utah

Mixed Tax Picture

The Beehive State's income tax system is rough on retirees—especially wealthier ones. Utah is one of only a handful of states that taxes Social Security benefits. Most other retirement income is exposed to the state's flat 4.95% income tax, too. Utah provides a small retirement-income tax credit that may help offset the tax on Social Security, but it's only available for certain income-eligible seniors.

Sales taxes in Utah are not quite as steep—but they're certainly not what you'd call low. The state's average combined state and local sales tax rate is 7.19%, which is above average.

Retirees do get some relief when it comes to property taxes in the state. The median property tax rate in Utah is tied for the 10th-lowest in the nation. Property tax breaks are also available for seniors with income below certain levels.

Income Tax Range

Utah has a flat tax of 4.95%.

Taxation of Social Security Benefits

Social Security benefits are included in Utah taxable income to the same extent they're taxed at the federal level. However, beginning in 2021, a nonrefundable tax credit is available for Social Security benefits. The credit is calculated by multiplying the Utah income tax rate (currently 4.95%) by the amount of Social Security benefits included in federal adjusted gross income (AGI). The total credit amount is reduced by $.025 for each dollar by which the taxpayer's modified AGI exceeds $25,000 for a married person filing a separate tax return, $30,000 for a single filer, and $50,000 for a married couple filing a joint return or a head-of-household filer. Taxpayers can't claim both the Social Security credit and the general $450 credit for retirees.

Tax Breaks for Other Retirement Income

Income from a qualified retirement plan may be deductible if contributions to the plan were previously taxed in another state.

Seniors born on or before December 31, 1952, can also claim a nonrefundable tax credit of up to $450 ($900 for joint filers). The credit is completely phased-out for single taxpayers with a modified AGI of $43,000 or more, joint or head-of-household filers with modified AGI of $50,000 or more, and married taxpayers filing separate returns with modified AGI of $34,000 or more.

Beginning in 2021, a separate nonrefundable tax credit is available for military retirement pay. The credit is calculated by multiplying the Utah income tax rate (currently 4.95%) by the amount of military retirement pay included in federal AGI. Retirees can't claim both the military retirement credit and the general $450 credit for retirees.

Railroad Retirement benefits are exempt.

Sales Tax

State levy is 4.85%, but mandatory 1% local sales tax and 0.25% county option sales tax are added to the state tax (for a 6.1% total rate). Plus, localities can add up to an additional 2.95%, making the average combined state and local rate 7.19%, according to the Tax Foundation.

Groceries: Taxable (1.75% state tax, plus mandatory 1.25% in local and county taxes)
Clothing: Taxable
Motor Vehicles: Taxable
Prescription Drugs: Exempt

Real Property Taxes

In Utah, the median property tax rate is $575 per $100,000 of assessed home value.

For 2021, homeowners 66 and older (and surviving spouses of any age) who earned $34,666 or less in 2020 can get a "circuit breaker" property tax credit of up to $1,067. An additional credit equal to the tax on 20% of a home's fair market value is also available. Homeowners who qualify for the circuit breaker generally also qualify for an indigent abatement of up to $1,067 or tax deferral.

Annual Car Taxes and Fees

An annual vehicle registration fee and a separate uniform fee are imposed.

Estate and Inheritance Taxes

No estate or inheritance tax.

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