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 well 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 uniform age-based fee are imposed.

Estate and Inheritance Taxes

No estate or inheritance tax.

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