Utah Tax Cut Will Save Most Taxpayers $2 or Less per Week
A recent Utah tax cut slashed the income tax rate for 2024, but high earners are the only ones expected to save significantly.
A Utah tax cut passed this month reduced the state's income tax rate from 4.65% to 4.55%, and the law is retroactive to the beginning of the 2024 tax year. However, for most Utah residents, the tax break is not a cause for celebration. That’s because only the state’s highest 20% of earners are expected to save more than a few dollars per week, according to an analysis from the Institution on Taxation and Economic Policy.
Several state Democrats, including Rep. Brett Garner (D-31), opposed the income tax cut, telling reporters that Utah is not addressing “real needs,” such as homelessness and funding for teachers. Garner posted on X, formerly Twitter, that instead, the "richest Utahns get $2k to likely not spend but save."
Utah tax cut for 2024
Income tax revenue was nearly $50 million less than expected during Utah’s 2023 legislative session, and some state lawmakers believe making tax cuts is part of the solution.
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During a conference, Gov. Spencer Cox said, “If we [Utah] want to see income grow, then we should probably tax it less.” And a press release from the Utah Senate refers to the latest income tax cut as an increased incentive to “work, save, invest and spend money.” However, the state’s current tax structure provides little incentive for the average employee.
- Workers with incomes between $33,400 and $60,800 are expected to save an average of $32 in 2024.
- The tax savings increase to an average of $60 per year ($5 per month) for those who earn between $60,800 and $99,200.
- Average tax savings are expected to range from $106 to $174 for workers making between $99,200 and $307,500.
- The highest 1% of earners are projected to save an average of more than $2,500 this year.
So, while it is true that the more you earn, the more you’ll save, Utahns would need a significant jump in earnings to feel much of an impact from the state’s latest income tax cut.
Tax changes for Utah in 2024
There is another income tax change in the works. But rather than cut the tax rate, the approval of SJR10 would lift the restriction on how the state can spend tax revenue. Currently, Utah is required to spend its income tax revenue on public education and certain social services.
Voters will get the final say this November, and if they approve SJR10, Utah will be allowed to use some of that tax revenue for other state needs. Critics of SJR10 worry the bill’s language is not strong enough to ensure proper education funding, but lawmakers have tied an appealing provision to the bill.
- A vote to lift the restriction is a vote to eliminate the state’s portion of the grocery tax.
- So, a vote against the bill would mean voting to keep the 1.75% grocery tax in place.
Utah is one of only thirteen states that still tax groceries, And even if SJR10 becomes law, residents will still pay a 1.25% tax on grocery items because the bill does not address local sales taxes.
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Katelyn has more than 6 years of experience working in tax and finance. While she specialized in tax content while working at Kiplinger from 2023 to 2024, Katelyn has also written for digital publications on topics including insurance, retirement, and financial planning and had financial advice commissioned by national print publications. She believes knowledge is the key to success and enjoys providing content that educates and informs.
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