Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 86 (2021GS)

Sponsor

Rep. Brooks, W.

Final action

Governor Signed 3/11/2021

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• defines terms;
• enacts a tax credit for social security benefits that are included in the claimant's federal adjusted gross income;
• provides that an individual who claims the tax credit for social security benefits may not also claim the retirement tax credit;
• grants rulemaking authority to the State Tax Commission; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

SOCIAL SECURITY TAX AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Walt Brooks
Senate Sponsor: 
Wayne A. Harper
Cosponsors:
Nelson T. Abbott
Carl R. Albrecht
Stewart E. Barlow
Kera Birkeland
Steve R. Christiansen
James A. Dunnigan
Steve Eliason
Craig Hall
Stephen G. Handy
Karianne Lisonbee
A. Cory Maloy
Kelly B. Miles
Jefferson Moss
Merrill F. Nelson
Val L. Peterson
Candice B. Pierucci
Susan Pulsipher
Adam Robertson
Mike Schultz
Travis M. Seegmiller
Rex P. Shipp
V. Lowry Snow
Robert M. Spendlove
Jeffrey D. Stenquist
Jordan D. Teuscher
Mike Winder
LONG TITLE
General Description:
This bill provides for an individual income tax credit for certain social security benefits.
Highlighted Provisions:
This bill:
▸ defines terms;
▸ enacts a tax credit for social security benefits that are included in the claimant's
federal adjusted gross income;
▸ provides that an individual who claims the tax credit for social security benefits may
not also claim the retirement tax credit;
▸ grants rulemaking authority to the State Tax Commission; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides retrospective operation.
Utah Code Sections Affected:
AMENDS:
59-10-1002.2
, as last amended by Laws of Utah 2016, Chapter 263
59-10-1019
, as renumbered and amended by Laws of Utah 2008, Chapter 389
ENACTS:
59-10-1042
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
59-10-1002.2
 is amended to read:
59-10-1002.2.
Apportionment of tax credits.
(1) A nonresident individual or a part-year resident individual that claims a tax credit
in accordance with Section 
59-10-1017
, 
59-10-1018
, 
59-10-1019
, 
59-10-1022
, 
59-10-1023
,
59-10-1024
, [
or
] 
59-10-1028
, or 
59-10-1042
 may only claim an apportioned amount of the tax
credit equal to:
(a) for a nonresident individual, the product of:
(i) the state income tax percentage for the nonresident individual; and
(ii) the amount of the tax credit that the nonresident individual would have been
allowed to claim but for the apportionment requirements of this section; or
(b) for a part-year resident individual, the product of:
(i) the state income tax percentage for the part-year resident individual; and
(ii) the amount of the tax credit that the part-year resident individual would have been
allowed to claim but for the apportionment requirements of this section.
(2) A nonresident estate or trust that claims a tax credit in accordance with Section
59-10-1017
, 
59-10-1020
, 
59-10-1022
, 
59-10-1024
, or 
59-10-1028
 may only claim an
apportioned amount of the tax credit equal to the product of:
(a) the state income tax percentage for the nonresident estate or trust; and
(b) the amount of the tax credit that the nonresident estate or trust would have been
allowed to claim but for the apportionment requirements of this section.
Section 2. Section 
59-10-1019
 is amended to read:
59-10-1019.
Definitions -- Nonrefundable retirement tax credit.
(1) As used in this section:
(a) "Eligible [
age 65 or older retiree
] 
claimant
" means a claimant, regardless of whether
that claimant is retired, who[
:
] 
was born on or before December 31, 1952.
[
(i) is 65 years of age or older; and
]
[
(ii) was born on or before December 31, 1952.
]
[
(b) (i) "Eligible retirement income" means income received by an eligible under age
retiree as a pension or annuity if that pension or annuity is:
]
[
(A) paid to the eligible under age 65 retiree or the surviving spouse of an eligible
under age 65 retiree; and
]
[
(B) (I) paid from an annuity contract purchased by an employer under a plan that
meets the requirements of Section 404(a)(2), Internal Revenue Code;
]
[
(II) purchased by an employee under a plan that meets the requirements of Section
408, Internal Revenue Code; or
]
[
(III) paid by:
]
[
(Aa) the United States;
]
[
(Bb) a state or a political subdivision of a state; or
]
[
(Cc) the District of Columbia.
]
[
(ii) "Eligible retirement income" does not include amounts received by the spouse of a
living eligible under age 65 retiree because of the eligible under age 65 retiree's having been
employed in a community property state.
]
[
(c) "Eligible under age 65 retiree" means a claimant, regardless of whether that
claimant is retired, who:
]
[
(i) is younger than 65 years of age;
]
[
(ii) was born on or before December 31, 1952; and
]
[
(iii) has eligible retirement income for the taxable year for which a tax credit is
claimed under this section.
]
[
(d)
] 
(b)
 "Head of household filing status" [
is as
] 
means the same as that term is
defined in Section 
59-10-1018
.
[
(e)
] 
(c)
 "Joint filing status" [
is as
] 
means the same as that term is
 defined in Section
59-10-1018
.
[
(f)
] 
(d)
 "Married filing separately status" means a married individual who:
(i) does not file a single federal individual income tax return jointly with that married
individual's spouse for the taxable year; and
(ii) files a single federal individual income tax return for the taxable year.
[
(g)
] 
(e)
 "Modified adjusted gross income" means the sum [
of an eligible age 65 or
older retiree's or eligible under age 65 retiree's
] 
of the following for an eligible claimant or, if
the eligible claimant's return under this chapter is allowed a joint filing status, the eligible
claimant and the eligible claimant's spouse
:
(i) adjusted gross income for the taxable year for which a tax credit is claimed under
this section;
(ii) any interest income that is not included in adjusted gross income for the taxable
year described in Subsection (1)[
(g)
]
(e)
(i); and
(iii) any addition to adjusted gross income required by Section 
59-10-114
 for the
taxable year described in Subsection (1)[
(g)
]
(e)
(i).
[
(h)
] 
(f)
 "Single filing status" means a single individual who files a single federal
individual income tax return for the taxable year.
(2) Except as provided in Section 
59-10-1002.2
 and [
subject to
] Subsections (3)
[
through (5): (a)
] 
and (4),
 each eligible [
age 65 or older retiree
] 
claimant
 may claim a
nonrefundable tax credit of $450 against taxes otherwise due under this part[
; or
]
.
[
(b) each eligible under age 65 retiree may claim a nonrefundable tax credit against
taxes otherwise due under this part in an amount equal to the lesser of:
]
[
(i) $288; or
]
[
(ii) the product of:
]
[
(A) the eligible under age 65 retiree's eligible retirement income for the taxable year
for which the eligible under age 65 retiree claims a tax credit under this section; and
]
[
(B) 6%.
]
[
(3) A tax credit under this section may not be carried forward or carried back.
]
(3) (a) An eligible claimant may not:
(i) carry forward or carry back the amount of a tax credit under this section that
exceeds the eligible claimant's tax liability for the taxable year; or
(ii) claim a tax credit under this section and a tax credit under Section 
59-10-1042
.
(b) An eligible claimant who qualifies for a tax credit under this section and a tax
credit under Section 
59-10-1042
 may elect whether to claim a tax credit under this section or a
tax credit under Section 
59-10-1042
.
(4) The [
sum of the tax credits
] 
tax credit
 allowed by Subsection (2) claimed on [
one
] 
a
return filed under this part shall be reduced by $.025 for each dollar by which modified
adjusted gross income for purposes of the return exceeds:
(a) for a federal individual income tax return that is allowed a married filing separately
status, $16,000;
(b) for a federal individual income tax return that is allowed a single filing status,
$25,000;
(c) for a federal individual income tax return that is allowed a head of household filing
status, $32,000; or
(d) for a return under this chapter that is allowed a joint filing status, $32,000.
[
(5) For purposes of determining the ownership of items of retirement income under
this section, common law doctrine shall be applied in all cases even though some items of
retirement income may have originated from service or investments in a community property
state.
]
Section 3. Section 
59-10-1042
 is enacted to read:
 59-10-1042.
Nonrefundable tax credit for social security benefits.
(1) As used in this section:
(a) "Head of household filing status" means the same as that term is defined in Section
59-10-1018
.
(b) "Joint filing status" means the same as that term is defined in Section 
59-10-1018
.
(c) "Married filing separately status" means a married individual who:
(i) does not file a single federal individual income tax return jointly with that married
individual's spouse for the taxable year; and
(ii) files a single federal individual income tax return for the taxable year.
(d) "Modified adjusted gross income" means the sum of the following for a claimant
or, if the claimant's return under this chapter is allowed a joint filing status, the claimant and
the claimant's spouse:
(i) adjusted gross income for the taxable year for which a tax credit is claimed under
this section;
(ii) any interest income that is not included in adjusted gross income for the taxable
year described in Subsection (1)(d)(i); and
(iii) any addition to adjusted gross income required by Section 
59-10-114
 for the
taxable year described in Subsection (1)(d)(i).
(e) "Single filing status" means a single individual who files a single federal individual
income tax return for the taxable year.
(f) "Social security benefit" means an amount received by a claimant as a monthly
benefit in accordance with the Social Security Act, 42 U.S.C. Sec. 401 et seq.
(2) Except as provided in Section 
59-10-1002.2
 and Subsections (3) and (4), each
claimant on a return that receives a social security benefit may claim a nonrefundable tax credit
against taxes otherwise due under this part equal to the product of:
(a) the percentage listed in Subsection 
59-10-104
(2); and
(b) the claimant's social security benefit that is included in adjusted gross income on
the claimant's federal income tax return for the taxable year.
(3) (a) A claimant may not:
(i) carry forward or carry back the amount of a tax credit under this section that
exceeds the claimant's tax liability for the taxable year; or
(ii) claim a tax credit under this section and a tax credit under Section 
59-10-1019
.
(b) A claimant that qualifies for a tax credit under this section and a tax credit under
Section 
59-10-1019
 may elect whether to claim a tax credit under this section or a tax credit
under Section 
59-10-1019
.
(4) The tax credit allowed by Subsection (2) claimed on a return filed under this part
shall be reduced by $.025 for each dollar by which modified adjusted gross income for
purposes of the return exceeds:
(a) for a federal individual income tax return that is allowed a married filing separately
status, $25,000;
(b) for a federal individual income tax return that is allowed a single filing status,
$30,000;
(c) for a federal individual income tax return that is allowed a head of household filing
status, $50,000; or
(d) for a return under this chapter that is allowed a joint filing status, $50,000.
(5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules governing the calculation and method for claiming the tax credit
described in this section.
Section 4. 
Retrospective operation.
This bill has retrospective operation for a taxable year beginning on or after January 1,
2021.