REQUEST LETTER

02-005

NAME

COMPANY

ADDRESS

PHONE

FAX

I would like an Advisory Opinion on the following tax situations concerning retirement for clients under 65 years old:

Question #1

Husband and wife divorce. The wife gets half of his retirement which is taxed to her. Can she get the Retirement Income Exemption/Deduction up to $4800.

Question #2

Husband and wife divorce. The wife gets half of his retirement which is taxed to her. Soon after the x-husband dies. Can she get the Retirement Income Exemption/Deduction up to $4800.

An immediate advisory opinion on these two questions would be greatly appreciated.

RESPONSE LETTER

DATE

NAME

COMPANY

ADDRESS

Re: Advisory Opinion—Income tax credit for retirement income

Dear NAME,

You have requested an advisory opinion on whether income received pursuant to a divorce settlement is eligible for Utah’s retirement income tax credit under Utah Code Ann. §59-10-114 (2) (d). Your questions specifically address retirement income received not by a participant in a retirement plan, but by that participant’s ex-spouse. Under section 59-10-114 (2) (d) an employee or surviving spouse (emphasis added) can subtract the amount received as retirement income from his or her federal taxable income. In both of your questions, the ex-spouse receiving the retirement income is neither the employee of the retirement plan provider, nor the surviving spouse of the employee. Accordingly, she cannot claim this credit.

Should you need further clarification from the Commission, you may contact us.

For the Commission,

Marc B. Johnson

Commissioner

MBJ/PL

02-005