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Credit for Income Tax Paid to Another StateNonresidents rarely qualify for this creditUtah Code §59-10-106
Tip: Part-year residents rarely qualify for this credit. If you completed line 17 of the Utah return and the income earned in another state(s) was NOT included in "Column A Utah Income " on form TC-40A, Part 3 you cannot take this credit. Do not use the state income tax withheld from the W-2 as the taxes paid to another state. You must complete the other state's return to determine the amount of taxes paid. As a Utah resident, you must report all of your income, regardless of where it was earned. As a part-year resident, all income received during the period of Utah residency is taxable in Utah, regardless of the source of that income. Income from Utah sources is taxable in Utah during the period of non-residency. A Utah resident or part-year resident whose income is taxed by Utah AND another state(s), the District of Columbia, or a possession of the United States, is entitled to a credit against Utah income tax for the amount of tax paid to the other state(s). Part-year residents will rarely qualify for this credit, as Utah and other states apportion income and only tax the income earned while a resident of that state. To qualify, the income must be:
Part-year residents must prorate the tax paid to other state(s). The credit only applies to the portion of the actual taxes paid on income that was taxed in both Utah and the other state. Calculate the Credit: To calculate the credit for taxes paid to another state, complete Utah form TC-40A, PART 1. If there are two or more states, use additional copies of TC-40A. Examples of how to calculate the credit are located on the Utah Tax Commission's Income Tax website. Attachments Required: You must attach TC-40A, PART 1 and a copy of each state's income tax return for which credit is claimed. |
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