Form Tc-40 - Individual Income Tax Return Instructions

Part 3 - Apportionable Nonrefundable

B. Taxpayers under age 65 who were born before

January 1, 1953

Credits

Each taxpayer (you, and/or your spouse if ﬁ ling jointly)

Apportionable nonrefundable credits can reduce your income

under age 65 at the end of 2011 and born before January

tax to zero, but cannot result in a refund.

1, 1953, who received eligible retirement income, may

Claim the following apportionable nonrefundable credits

qualify for a credit up to $288, but not more than 6% of

(credits that must be apportioned for nonresidents and part-

the qualifying income. The credit is limited by the total of

year residents) that apply on TC-40A, Part 3 and attach it to

your modiﬁ ed adjusted gross income, nontaxable interest

your Utah return.

income, and any additions to income reported on TC-40A,

Part 1.

On TC-40A, write the code and amount of each apportionable

nonrefundable credit you are claiming. Enter the sum of

Note: The retirement credit is phased-out when modiﬁ ed

these credits being claimed on line 23 of your TC-40. Each

adjusted gross income exceeds certain amounts based on

apportionable nonrefundable credit is explained below.

ﬁ ling status (shown on line 15 of TC-40C). When calculating

modiﬁ ed adjusted gross income on line 14, do not include

Keep all related documents with your records. You may have

any municipal bond interest on line 13 reported on TC-40A,

to provide this information later to verify a credit claimed on

Part 1, code 57.

your return.

Qualifying Income

Codes for Apportionable Nonrefundable Credits, TC-40A Part 3

Qualifying income is pensions, annuities or taxable retirement

04 Capital Gain Transactions Credit

social security beneﬁ ts. To claim the credit you must have

18 Retirement Tax Credit

20 Utah Educational Savings Plan (UESP) 529 Plan Credit

earned the qualifying income. You cannot use pension, annuity

22 Medical Care Savings Account (MSA) Credit

or social security income of your spouse as your qualiﬁ ed

23 Health Beneﬁ t Plan Credit

income.

24 Qualifying Solar Project Credit

The following are retirement income:

(04) Capital Gain Transactions Credit

• Amounts paid from an annuity contract bought under a

(UC §59-10-1022)

plan your employer contributed to and you cannot revoke

You may claim a credit for the short-term and long-term

under IRC Section 404(a)(2);

capital gain on a transaction if:

• Amounts purchased by an employee under a plan that

a. The transaction occurs on or after January 1, 2008;

meets the requirements of IRC Section 408 (IRA plans);

b. At least 70% of the gross proceeds of the transaction

• Amounts paid by the United States, a state thereof, or the

are used to buy stock in a qualiﬁ ed Utah small business

District of Columbia; and

corporation within 12 months from when the capital gain

• Taxable retirement social security beneﬁ ts (excluding

transaction occurred; and

survivor beneﬁ ts), only if included in your federal adjusted

c. You did not have an ownership interest in the qualiﬁ ed Utah

gross income.

small business corporation at the time of investment.

Income That Does NOT Qualify

Calculation of Capital Gain Transactions Tax Credit

• Disbursements from deferred compensation plans, such

as Section 401(k) and Section 457 plans; and

________

1. Eligible short-term or long-term capital gain

• Social security survivor beneﬁ ts a child receives on behalf

________

2. Multiply line 1 by 5% (.05). This is your credit.

of a deceased employee.

Enter this amount on TC-40A, Part 3, using code 04.

(20) Utah Educational Savings Plan (UESP) 529 Plan

Credit (UC §59-10-1017)

See incometax.utah.gov/credits/capital-gains for more

If a qualiﬁ ed contribution was made to your Utah Educational

information.

Savings Plan (UESP) 529 account, you may claim a

There is no form for this credit. Keep all related documents

nonrefundable credit. To qualify, the contribution must be

with your records.

made during the taxable year and not deducted on your

Note: Any credit that is more than the tax liability may not

federal return.

be carried back or forward.

If your tax ﬁ ling status is single, head of household, married

ﬁ ling separate, or qualifying widow(er), the credit is 5% of

(18) Retirement Tax Credit

contributions made (up to $1,740 per qualiﬁ ed beneﬁ ciary)

(UC §59-10-1019)

Complete form TC-40C to calculate your retirement credit.

during the tax year, with a maximum credit of $87 per qualiﬁ ed

Enter the amount from TC-40C, line 18 on TC-40A, Part 3,

beneﬁ ciary.

using code 18. Attach the TC-40C to your Utah return.

If married ﬁ ling jointly, the credit is 5% of contributions made

(up to $3,480 per qualiﬁ ed beneﬁ ciary) during the tax year,

Note: Any retirement credit that is more than the tax liability

with a maximum credit of $174 per qualiﬁ ed beneﬁ ciary.

may not be carried back or forward.

If both you and your spouse receive a TC-675H form for

A. Taxpayers age 65 or older as of December 31, 2011

contributions for the same beneﬁ ciary, you must limit your

Each taxpayer (you, and/or your spouse if ﬁ ling jointly) age

total aggregated tax credit to $174 for that beneﬁ ciary.

65 or older at the end of 2011, may be allowed a retirement

If you are a UESP account owner, you will receive form TC-

credit of up to $450. This credit is limited by the total of

675H, Utah Educational Savings Plan Tax Statement for

your modiﬁ ed adjusted gross income, nontaxable interest

income, and any additions to income reported on TC-40A,

Contributions, Withdrawals, and Transfers, from UESP. Your

Part 1.

allowable credit is shown on line 1A or line 1B, whichever

applies. Enter this credit on TC-40A, Part 3, using code 20.

Form Tc-40 - Individual Income Tax Return Instructions - 2011 Page 16

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