Enrolled Copy S.B. 71 1

Social Security Tax Revisions 2025 GENERAL SESSION STATE OF UTAH Chief Sponsor: Wayne A. Harper House Sponsor: Walt Brooks Cosponsor: Heidi Balderree 2

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LONG TITLE 4

General Description: 5

This bill modifies the individual income tax credit for social security benefits. 6

Highlighted Provisions: 7

This bill: 8 ▸ expands eligibility for the social security benefits tax credit by increasing the thresholds 9 for the income-based phaseout; and 10 ▸ makes technical changes. 11

Money Appropriated in this Bill: 12

None 13

Other Special Clauses: 14

This bill provides retrospective operation. 15

Utah Code Sections Affected: 16

AMENDS: 17

59-10-1042, as last amended by Laws of Utah 2023, Chapter 459 18

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Be it enacted by the Legislature of the state of Utah: 20

Section 1. Section 59-10-1042 is amended to read: 21

59-10-1042 . Nonrefundable tax credit for social security benefits. 22

(1) As used in this section: 23 (a) "Head of household filing status" means the same as that term is defined in Section 24 59-10-1018. 25 (b) "Joint filing status" means the same as that term is defined in Section 59-10-1018.

S.B. 71 Enrolled Copy 26 (c) "Married filing separately status" means a married individual who: 27 (i) does not file a single federal individual income tax return jointly with that married 28 individual's spouse for the taxable year; and 29 (ii) files a single federal individual income tax return for the taxable year. 30 (d) "Modified adjusted gross income" means the sum of the following for a claimant or, 31 if the claimant's return under this chapter is allowed a joint filing status, the claimant 32 and the claimant's spouse: 33 (i) adjusted gross income for the taxable year for which a tax credit is claimed under 34 this section; 35 (ii) any interest income that is not included in adjusted gross income for the taxable 36 year described in Subsection (1)(d)(i); and 37 (iii) any addition to adjusted gross income required by Section 59-10-114 for the 38 taxable year described in Subsection (1)(d)(i). 39 (e) "Single filing status" means a single individual who files a single federal individual 40 income tax return for the taxable year. 41 (f) "Social security benefit" means an amount received by a claimant as a monthly 42 benefit in accordance with the Social Security Act, 42 U.S.C. Sec. 401 et seq. 43

(2) Except as provided in Section 59-10-1002.2 and Subsections (3) and (4), each claimant 44 on a return that receives a social security benefit may claim a nonrefundable tax credit 45 against taxes otherwise due under this part equal to the product of: 46 (a) the percentage listed in Subsection 59-10-104(2); and 47 (b) the claimant's social security benefit that is included in [adjusted gross income on the 48 claimant's federal income tax return] the claimant's state taxable income for the 49 taxable year. 50

(3) A claimant may not: 51 (a) carry forward or carry back the amount of a tax credit under this section that exceeds 52 the claimant's tax liability for the taxable year; or 53 (b) claim a tax credit under this section for a taxable year if a tax credit under Section 54 59-10-1019 is claimed on the claimant's return for the same taxable year. 55

(4) The tax credit allowed by Subsection (2) claimed on a return filed under this part shall 56 be reduced by $.025 for each dollar by which modified adjusted gross income for 57 purposes of the return exceeds: 58 (a) for a federal individual income tax return that is allowed a married filing separately 59 status, [$37,500] $45,000; - 2 -

Enrolled Copy S.B. 71 60 (b) for a federal individual income tax return that is allowed a single filing status, [ 61 $45,000] $54,000; 62 (c) for a federal individual income tax return that is allowed a head of household filing 63 status, [$75,000] $90,000; or 64 (d) for a return under this chapter that is allowed a joint filing status, [$75,000] $90,000. 65

(5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the 66 commission may make rules governing the calculation and method for claiming the tax 67 credit described in this section. 68

Section 2. Effective date. 69

This bill takes effect on May 7, 2025. 70

Section 3. Retrospective operation. 71

This bill has retrospective operation for a taxable year beginning on or after January 1, 72

2025. - 3 -