2006 Utah Code - 59-10-114 (Superseded 01/01/07) — Additions to and subtractions from federal taxable income of an individual.

     59-10-114 (Superseded 01/01/07).   Additions to and subtractions from federal taxable income of an individual.
     (1) There shall be added to federal taxable income of a resident or nonresident individual:
     (a) the amount of any income tax imposed by this or any predecessor Utah individual income tax law and the amount of any income tax imposed by the laws of another state, the District of Columbia, or a possession of the United States, to the extent deducted from federal adjusted gross income, as defined by Section 62, Internal Revenue Code, in determining federal taxable income;
     (b) a lump sum distribution that the taxpayer does not include in adjusted gross income on the taxpayer's federal individual income tax return for the taxable year;
     (c) for taxable years beginning on or after January 1, 2002, the amount of a child's income calculated under Subsection (5) that:
     (i) a parent elects to report on the parent's federal individual income tax return for the taxable year; and
     (ii) the parent does not include in adjusted gross income on the parent's federal individual income tax return for the taxable year;
     (d) 25% of the personal exemptions, as defined and calculated in the Internal Revenue Code;
     (e) a withdrawal from a medical care savings account and any penalty imposed in the taxable year if:
     (i) the taxpayer did not deduct or include the amounts on the taxpayer's federal individual income tax return pursuant to Section 220, Internal Revenue Code; and
     (ii) the withdrawal is subject to Subsections 31A-32a-105(1) and (2);
     (f) the amount disbursed to an account owner under Title 53B, Chapter 8a, Higher Education Savings Incentive Program, in the year in which the amount is disbursed;
     (g) except as provided in Subsection (6), for taxable years beginning on or after January 1, 2003, for bonds, notes, and other evidences of indebtedness acquired on or after January 1, 2003, the interest from bonds, notes, and other evidences of indebtedness issued by one or more of the following entities:
     (i) a state other than this state;
     (ii) the District of Columbia;
     (iii) a political subdivision of a state other than this state; or
     (iv) an agency or instrumentality of an entity described in Subsections (1)(g)(i) through (iii);
     (h) subject to Subsection (2)(n), any distribution received by a resident beneficiary of a resident trust of income that was taxed at the trust level for federal tax purposes, but was subtracted from state taxable income of the trust pursuant to Subsection 59-10-202(2)(c);
     (i) any distribution received by a resident beneficiary of a nonresident trust of undistributed distributable net income realized by the trust on or after January 1, 2004, if that undistributed distributable net income was taxed at the trust level for federal tax purposes, but was not taxed at the trust level by any state, with undistributed distributable net income considered to be distributed from the most recently accumulated undistributed distributable net income; and
     (j) any adoption expense:

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     (i) for which a resident or nonresident individual receives reimbursement from another person; and
     (ii) to the extent to which the resident or nonresident individual deducts that adoption expense from federal taxable income on a state or federal individual income tax return.
     (2) There shall be subtracted from federal taxable income of a resident or nonresident individual:
     (a) the interest or a dividend on obligations or securities of the United States and its possessions or of any authority, commission, or instrumentality of the United States, to the extent that interest or dividend is included in gross income for federal income tax purposes for the taxable year but exempt from state income taxes under the laws of the United States, but the amount subtracted under this Subsection (2)(a) shall be reduced by any interest on indebtedness incurred or continued to purchase or carry the obligations or securities described in this Subsection (2)(a), and by any expenses incurred in the production of interest or dividend income described in this Subsection (2)(a) to the extent that such expenses, including amortizable bond premiums, are deductible in determining federal taxable income;
     (b) 1/2 of the net amount of any income tax paid or payable to the United States after all allowable credits, as reported on the United States individual income tax return of the taxpayer for the same taxable year;
     (c) the amount of adoption expenses for one of the following taxable years as elected by the resident or nonresident individual:
     (i) regardless of whether a court issues an order granting the adoption, the taxable year in which the adoption expenses are:
     (A) paid; or
     (B) incurred;
     (ii) the taxable year in which a court issues an order granting the adoption; or
     (iii) any year in which the resident or nonresident individual may claim the federal adoption expenses credit under Section 23, Internal Revenue Code;
     (d) amounts received by taxpayers under age 65 as retirement income which, for purposes of this section, means pensions and annuities, paid from an annuity contract purchased by an employer under a plan which meets the requirements of Section 404(a)(2), Internal Revenue Code, or purchased by an employee under a plan which meets the requirements of Section 408, Internal Revenue Code, or paid by the United States, a state, or political subdivision thereof, or the District of Columbia, to the employee involved or the surviving spouse;
     (e) for each taxpayer age 65 or over before the close of the taxable year, a $7,500 personal retirement exemption;
     (f) 75% of the amount of the personal exemption, as defined and calculated in the Internal Revenue Code, for each dependent child with a disability and adult with a disability who is claimed as a dependent on a taxpayer's return;
     (g) subject to the limitations of Subsection (3)(e), amounts a taxpayer pays during the taxable year for health care insurance, as defined in Title 31A, Chapter 1, General Provisions:
     (i) for:
     (A) the taxpayer;
     (B) the taxpayer's spouse; and
     (C) the taxpayer's dependents; and
     (ii) to the extent the taxpayer does not deduct the amounts under Section 125, 162, or

213, Internal Revenue Code, in determining federal taxable income for the taxable year;
     (h) (i) except as provided in this Subsection (2)(h), the amount of a contribution made during the taxable year on behalf of the taxpayer to a medical care savings account and interest earned on a contribution to a medical care savings account established pursuant to Title 31A, Chapter 32a, Medical Care Savings Account Act, to the extent the contribution is accepted by the account administrator as provided in the Medical Care Savings Account Act, and if the taxpayer did not deduct or include amounts on the taxpayer's federal individual income tax return pursuant to Section 220, Internal Revenue Code; and
     (ii) a contribution deductible under this Subsection (2)(h) may not exceed either of the following:
     (A) the maximum contribution allowed under the Medical Care Savings Account Act for the tax year multiplied by two for taxpayers who file a joint return, if neither spouse is covered by health care insurance as defined in Section 31A-1-301 or self-funded plan that covers the other spouse, and each spouse has a medical care savings account; or
     (B) the maximum contribution allowed under the Medical Care Savings Account Act for the tax year for taxpayers:
     (I) who do not file a joint return; or
     (II) who file a joint return, but do not qualify under Subsection (2)(h)(ii)(A);
     (i) the amount included in federal taxable income that was derived from money paid by an account owner to the program fund under Title 53B, Chapter 8a, Higher Education Savings Incentive Program, not to exceed amounts determined under Subsection 53B-8a-106(1)(d), and investment income earned on account agreements entered into under Section 53B-8a-106 that is included in federal taxable income, but only when the funds are used for qualified higher education costs of the beneficiary;
     (j) for taxable years beginning on or after January 1, 2000, any amounts paid for premiums for long-term care insurance as defined in Section 31A-1-301 to the extent the amounts paid for long-term care insurance were not deducted under Section 213, Internal Revenue Code, in determining federal taxable income;
     (k) for taxable years beginning on or after January 1, 2000, if the conditions of Subsection (4)(a) are met, the amount of income derived by a Ute tribal member:
     (i) during a time period that the Ute tribal member resides on homesteaded land diminished from the Uintah and Ouray Reservation; and
     (ii) from a source within the Uintah and Ouray Reservation;
     (l) (i) for taxable years beginning on or after January 1, 2003, the total amount of a resident or nonresident individual's short-term capital gain or long-term capital gain on a capital gain transaction:
     (A) that occurs on or after January 1, 2003;
     (B) if 70% or more of the gross proceeds of the capital gain transaction are expended:
     (I) to purchase qualifying stock in a Utah small business corporation; and
     (II) within a 12-month period after the day on which the capital gain transaction occurs; and
     (C) if, prior to the purchase of the qualifying stock described in Subsection (2)(l)(i)(B)(I), the resident or nonresident individual did not have an ownership interest in the Utah small business corporation that issued the qualifying stock; and
     (ii) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the

commission may make rules:
     (A) defining the term "gross proceeds"; and
     (B) for purposes of Subsection (2)(l)(i)(C), prescribing the circumstances under which a resident or nonresident individual has an ownership interest in a Utah small business corporation;
     (m) for the taxable year beginning on or after January 1, 2005, but beginning on or before December 31, 2005, the first $2,200 of income a qualifying military service member receives:
     (i) for service:
     (A) as a qualifying military service member; or
     (B) under an order into active service in accordance with Section 39-1-5; and
     (ii) to the extent that income is included in adjusted gross income on that resident or nonresident individual's federal individual income tax return for that taxable year;
     (n) an amount received by a resident or nonresident individual or distribution received by a resident or nonresident beneficiary of a resident trust:
     (i) if that amount or distribution constitutes a refund of taxes imposed by:
     (A) a state; or
     (B) the District of Columbia; and
     (ii) to the extent that amount or distribution is included in adjusted gross income for that taxable year on the federal individual income tax return of the resident or nonresident individual or resident or nonresident beneficiary of a resident trust;
     (o) the amount of a railroad retirement benefit:
     (i) paid:
     (A) in accordance with The Railroad Retirement Act of 1974, 45 U.S.C. Sec. 231 et seq.;
     (B) to a resident or nonresident individual; and
     (C) for the taxable year; and
     (ii) to the extent that railroad retirement benefit is included in adjusted gross income on that resident or nonresident individual's federal individual income tax return for that taxable year; and
     (p) an amount:
     (i) received by an enrolled member of an American Indian tribe; and
     (ii) to the extent that the state is not authorized or permitted to impose a tax under this part on that amount in accordance with:
     (A) federal law;
     (B) a treaty; or
     (C) a final decision issued by a court of competent jurisdiction.
     (3) (a) For purposes of Subsection (2)(d), the amount of retirement income subtracted for taxpayers under 65 shall be the lesser of the amount included in federal taxable income, or $4,800, except that:
     (i) for married taxpayers filing joint returns, for each $1 of adjusted gross income earned over $32,000, the amount of the retirement income exemption that may be subtracted shall be reduced by 50 cents;
     (ii) for married taxpayers filing separate returns, for each $1 of adjusted gross income earned over $16,000, the amount of the retirement income exemption that may be subtracted shall be reduced by 50 cents; and
     (iii) for individual taxpayers, for each $1 of adjusted gross income earned over $25,000, the amount of the retirement income exemption that may be subtracted shall be reduced by 50

cents.
     (b) For purposes of Subsection (2)(e), the amount of the personal retirement exemption shall be further reduced according to the following schedule:
     (i) for married taxpayers filing joint returns, for each $1 of adjusted gross income earned over $32,000, the amount of the personal retirement exemption shall be reduced by 50 cents;
     (ii) for married taxpayers filing separate returns, for each $1 of adjusted gross income earned over $16,000, the amount of the personal retirement exemption shall be reduced by 50 cents; and
     (iii) for individual taxpayers, for each $1 of adjusted gross income earned over $25,000, the amount of the personal retirement exemption shall be reduced by 50 cents.
     (c) For purposes of Subsections (3)(a) and (b), adjusted gross income shall be calculated by adding to federal adjusted gross income any interest income not otherwise included in federal adjusted gross income.
     (d) For purposes of determining ownership of items of retirement income common law doctrine will be applied in all cases even though some items may have originated from service or investments in a community property state. Amounts received by the spouse of a living retiree because of the retiree's having been employed in a community property state are not deductible as retirement income of such spouse.
     (e) For purposes of Subsection (2)(g), a subtraction for an amount paid for health care insurance as defined in Title 31A, Chapter 1, General Provisions, is not allowed:
     (i) for an amount that is reimbursed or funded in whole or in part by the federal government, the state, or an agency or instrumentality of the federal government or the state; and
     (ii) for a taxpayer who is eligible to participate in a health plan maintained and funded in whole or in part by the taxpayer's employer or the taxpayer's spouse's employer.
     (4) (a) A subtraction for an amount described in Subsection (2)(k) is allowed only if:
     (i) the taxpayer is a Ute tribal member; and
     (ii) the governor and the Ute tribe execute and maintain an agreement meeting the requirements of this Subsection (4).
     (b) The agreement described in Subsection (4)(a):
     (i) may not:
     (A) authorize the state to impose a tax in addition to a tax imposed under this chapter;
     (B) provide a subtraction under this section greater than or different from the subtraction described in Subsection (2)(k); or
     (C) affect the power of the state to establish rates of taxation; and
     (ii) shall:
     (A) provide for the implementation of the subtraction described in Subsection (2)(k);
     (B) be in writing;
     (C) be signed by:
     (I) the governor; and
     (II) the chair of the Business Committee of the Ute tribe;
     (D) be conditioned on obtaining any approval required by federal law; and
     (E) state the effective date of the agreement.
     (c) (i) The governor shall report to the commission by no later than February 1 of each year regarding whether or not an agreement meeting the requirements of this Subsection (4) is in effect.

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     (ii) If an agreement meeting the requirements of this Subsection (4) is terminated, the subtraction permitted under Subsection (2)(k) is not allowed for taxable years beginning on or after the January 1 following the termination of the agreement.
     (d) For purposes of Subsection (2)(k) and in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the commission may make rules:
     (i) for determining whether income is derived from a source within the Uintah and Ouray Reservation; and
     (ii) that are substantially similar to how federal adjusted gross income derived from Utah sources is determined under Section 59-10-117.
     (5) (a) For purposes of this Subsection (5), "Form 8814" means:
     (i) the federal individual income tax Form 8814, Parents' Election To Report Child's Interest and Dividends; or
     (ii) (A) for taxable years beginning on or after January 1, 2002, a form designated by the commission in accordance with Subsection (5)(a)(ii)(B) as being substantially similar to 2000 Form 8814 if for purposes of federal individual income taxes the information contained on 2000 Form 8814 is reported on a form other than Form 8814; and
     (B) for purposes of Subsection (5)(a)(ii)(A) and in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the commission may make rules designating a form as being substantially similar to 2000 Form 8814 if for purposes of federal individual income taxes the information contained on 2000 Form 8814 is reported on a form other than Form 8814.
     (b) The amount of a child's income added to adjusted gross income under Subsection (1)(c) is equal to the difference between:
     (i) the lesser of:
     (A) the base amount specified on Form 8814; and
     (B) the sum of the following reported on Form 8814:
     (I) the child's taxable interest;
     (II) the child's ordinary dividends; and
     (III) the child's capital gain distributions; and
     (ii) the amount not taxed that is specified on Form 8814.
     (6) Notwithstanding Subsection (1)(g), interest from bonds, notes, and other evidences of indebtedness issued by an entity described in Subsections (1)(g)(i) through (iv) may not be added to federal taxable income of a resident or nonresident individual if, as annually determined by the commission:
     (a) for an entity described in Subsection (1)(g)(i) or (ii), the entity and all of the political subdivisions, agencies, or instrumentalities of the entity do not impose a tax based on income on any part of the bonds, notes, and other evidences of indebtedness of this state; or
     (b) for an entity described in Subsection (1)(g)(iii) or (iv), the following do not impose a tax based on income on any part of the bonds, notes, and other evidences of indebtedness of this state:
     (i) the entity; or
     (ii) (A) the state in which the entity is located; or
     (B) the District of Columbia, if the entity is located within the District of Columbia.

No History Available for This Section