Utah state tax benefits information

Utah taxpayers, depending on their tax-filing status, can claim a 5 percent tax credit/deduction per qualified beneficiary for contributions to their UESP account up to a certain limit. See table below for specific information.

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*Tax deduction

Married couples are not required to have separate UESP accounts to claim the joint tax benefits. However, if both spouses own separate accounts for the same beneficiary, each will receive a Utah state tax form TC-675H for his or her account. Their aggregated maximum Utah state income tax credit is then limited to one joint tax credit per qualified beneficiary.

For UGMA/UTMA accounts, only the account owner, who is also the beneficiary, is eligible for state tax benefits, even if the account owner is a minor.

A nonresident or part-year Utah resident can claim only a prorated amount of the Utah state income tax credit. The apportioned tax credit is based on the percentage of income the account owner earned and received in Utah of his or her total income during the tax year. The percentage is calculated by dividing the modified Utah adjusted gross income earned (Utah state taxable income) by the account owner’s modified federal adjusted gross income.

The Utah state income tax credit is then multiplied by that percentage, and the result is the apportioned tax credit that may be claimed on the account owner’s Utah state income tax return.