Income Tax Special Instructions For Married Couples Where One Spouse Is A Utah Non-Resident

How to Calculate Utah Tax

• Other state deductions (see instructions for line 13

of TC-40).

Using Special Instructions

c. The only item on the Utah return not allocated

Married couples that qualify to use Special Instructions and

between the spouses’ separate returns is his or her

file a federal return as married filing joint may file Utah

personal exemption.

returns as married filing separate. If they file a joint federal

Example: If the husband has 80 percent of the

return, both spouses must compute Utah taxable income

federal adjusted gross income, he may add-back or

“as if” their federal income had been computed separately,

deduct 80% of each item listed in “2-b” above, but

as follows. (Retain documentation of all computations with

he may deduct 100% of his personal exemption. The

your records.)

wife would add-back or deduct 20 percent of each

1. Determine the total federal adjusted gross income for

item listed in “2-b” above and deduct 100 percent of

each spouse. Divide any adjustments between the

her personal exemption.

spouses in proportion to their respective incomes.

4. The amounts claimed on the Utah return, line 5 (state

2. Allocate a portion of each Utah add-back item (lines 5 and

income tax deducted as a federal itemized deduction)

6 of TC-40) and deduction (lines 8 through 13 of TC-40) to

and line 8 (itemized deductions) are limited if federal

each spouse. Determine this allocation as follows:

adjusted gross income exceeds $71,350. (The standard

a. Divide the federal adjusted gross income of each

deduction, if claimed on line 8, is not subject to any

spouse by the federal adjusted gross income shown

limitation.) See the IRS instructions for Schedule A if this

on their joint federal return. Round the resulting

limitation applies to either spouse.

percentage to four decimal places.

5. Line 9, personal exemptions deduction, is limited if

b. Multiply each Utah add-back item and deduction by

federal adjusted gross income exceeds $107,025. See

the percentage calculated in “2-a” above. The

the Utah instructions for line 9 if this limitation applies to

allocable add-back items and deductions are:

either spouse.

• State income tax deducted as an itemized deduc-

6. Complete the remainder of the Utah return.

tion of federal Schedule A (do not include sales tax

a. Resident spouse – Use the Utah taxable income on

deducted on Schedule A instead of income tax).

line 15 to calculate the Utah income tax on line 16b.

• Other items that are added back to federal

b. Nonresident spouse – Use the Utah taxable income

adjusted gross income on the state return (see

on line 15 to calculate the Utah income tax on line

instructions for line 6 of TC-40).

16b. Complete Utah form TC-40C to determine the

• Standard or itemized deductions.

income from Utah sources. Follow the instructions

for line 17 of the return, “For Non or Part-year

• State exemptions for dependents.

Residents Only,” to calculate the Utah tax.

• One-half the federal tax liability.

A nonresident spouse with no Utah source income is

• State income tax refund included on the federal

not required to file a Utah return.

return.

Example for Tax Year 2004:

Becky was a full-year resident of Utah before marrying Alex in December 2004. Becky had a dependent daughter by a previous marriage.

Alex was a resident of Wyoming prior to the wedding. After their honeymoon, they returned to Utah and established residence in 2005. They

qualify to use Special Instructions because Becky was a full-year resident and Alex was a full-year nonresident. Their combined federal

adjusted gross income reported on their federal joint return was $75,000, consisting of $45,000 earned by Alex in Wyoming and $30,000

earned by Becky in Utah. Dividing $30,000 by $75,000 equals .40 or 40% to be used by Becky to allocate the different items on her separate

Utah resident return.

Joint

“As If” Joint

Separate

Becky’s Utah Resident Return

Federal Return

Utah Return

Percentage

Utah Return

Form 1040

Form TC-40

Allocation

Form TC-40

Federal adjusted gross income

$75,000

$30,000

State income tax deducted as an itemized deduction

3,710

0.40

1,484

Other additions to Utah income

0.40

Standard or itemized deductions

(10,000)

0.40

(4,000)

Alex’s personal exemption

(3,100)

(2,325) *

.00

Becky’s personal exemption

(3,100)

(2,325) *

1.00

(2,325)

Dependent’s exemption

(3,100)

(2,325) *

0.40

(930)

Federal tax (state deduction is 1/2 of federal tax)

(7,644)

(3,822)

0.40

(1,529)

State refund from line 10 of federal return

(25)

0.40

(10)

Other deductions from Utah income

0.40

Utah taxable income

$57,888

$22,690

Utah tax calculated on line 16b (using married filing separate tax rates)

$3,810

$1,467

* State exemption for 2004 is $2,325 (75% of federal exemption of $3,100).

NOTE: Couples who qualify to use Special Instructions may use a different method of allocating add-back items and

deductions than outlined in this publication, if that method more accurately reflects each spouse’s separate state taxable

income. Keep all documentation of your computations with your return.

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Income Tax Special Instructions For Married Couples Where One Spouse Is A Utah Non-Resident - 2004 Page 2

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