HB 210

03-02 10:56  5th Sub. (Salmon) H.B. 210
  Melissa G. Ballard proposes the following substitute bill:
1Tax Penalties Amendments
  2026 GENERAL SESSION
  STATE OF UTAH
  Chief Sponsor: Melissa G. Ballard
  Senate Sponsor: Heidi Balderree
2
3   LONG TITLE
4   General Description:
5This bill addresses tax penalties within the Individual Income Tax Act.
6   Highlighted Provisions:
7This bill:
8▸ removes marriage penalties from certain individual income tax credits over a five-year
9   period, resulting in the income phaseout amounts for filers who have single, head of
10   household, or married filing separately status, beginning in 2030, to be half of the
11   amount for filers who have joint filing status; and
12▸ makes technical changes.
13   Money Appropriated in this Bill:
14None
15   Other Special Clauses:
16This bill provides retrospective operation.
17   Utah Code Sections Affected:
  5th Sub. H.B. 210
18   AMENDS:
1959-10-1018, as last amended by Laws of Utah 2023, Chapter 459
2059-10-1019, as last amended by Laws of Utah 2022, Chapter 258
2159-10-1047, as last amended by Laws of Utah 2025, Chapter 407
22
23   Be it enacted by the Legislature of the state of Utah:
24Section 1. Section 59-10-1018 is amended to read:
2559-10-1018 . Definitions -- Nonrefundable taxpayer tax credits.
26   (1) As used in this section:
27(a) "Head of household filing status" means a head of household, as defined in Section
282(b), Internal Revenue Code, who files a single federal individual income tax return
29for the taxable year.
5th Sub. (Salmon) H.B. 210  03-02 10:56
30      (b) "Joint filing status" means:
31(i) spouses who file a single return jointly under this chapter for a taxable year; or
32(ii) a surviving spouse, as defined in Section 2(a), Internal Revenue Code, who files a
33single federal individual income tax return for the taxable year.
34      (c) "Married filing separately status" means a married individual who:
35(i) does not file a single federal individual income tax return jointly with that married
36individual's spouse for the taxable year; and
37(ii) files a single federal individual income tax return for the taxable year.
38      [(c)] (d) "Qualifying dependent" means an individual with respect to whom the claimant
39is allowed to claim a tax credit under Section 24, Internal Revenue Code, on the
40claimant's federal individual income tax return for the taxable year.
41      [(d)] (e) "Single filing status" means[:] a single individual who files a single federal
42individual income tax return for the taxable year.
43[(i) a single individual who files a single federal individual income tax return for the
44taxable year; or]
45[(ii) a married individual who:]
46[(A) does not file a single federal individual income tax return jointly with that
47married individual's spouse for the taxable year; and]
48[(B) files a single federal individual income tax return for the taxable year.]
49      [(e)] (f) "State or local income tax" means the lesser of:
50(i) the amount of state or local income tax that the claimant:
51(A) pays for the taxable year; and
52(B) reports on the claimant's federal individual income tax return for the taxable
53year, regardless of whether the claimant is allowed an itemized deduction on
54the claimant's federal individual income tax return for the taxable year for the
55full amount of state or local income tax paid; and
56(ii) $10,000.
57      [(f)] (g)(i) "Utah itemized deduction" means the amount the claimant deducts as
58allowed as an itemized deduction on the claimant's federal individual income tax
59return for that taxable year minus any amount of state or local income tax for the
60taxable year.
61(ii) "Utah itemized deduction" does not include any amount of qualified business
62income that the claimant subtracts as allowed by Section 199A, Internal Revenue
63Code, on the claimant's federal income tax return for that taxable year.
  -2-
03-02 10:56  5th Sub. (Salmon) H.B. 210
64[(g)] (h) "Utah personal exemption" means, subject to Subsection (6), $1,750 multiplied
65by the number of the claimant's qualifying dependents plus an additional qualifying
66dependent in the year of a qualifying dependent's birth.
67   (2) Except as provided in Section 59-10-1002.2, and subject to Subsections (3) through (5),
68a claimant may claim a nonrefundable tax credit against taxes otherwise due under this [
69part] chapter equal to the sum of:
70(a)(i) for a claimant that deducts the standard deduction on the claimant's federal
71individual income tax return for the taxable year, 6% of the amount the claimant
72deducts as allowed as the standard deduction on the claimant's federal individual
73income tax return for that taxable year; or
74(ii) for a claimant that itemizes deductions on the claimant's federal individual
75income tax return for the taxable year, 6% of the amount of the claimant's Utah
76itemized deduction; and
77(b) 6% of the claimant's Utah personal exemption.
78   (3) A claimant may not carry forward or carry back a tax credit under this section.
79   (4) The tax credit allowed by Subsection (2) shall be reduced by $.013 for each dollar by
80which a claimant's state taxable income exceeds:
81(a) for a claimant who has a single filing status or a married filing separately status, [
82$15,095] $18,696;
83(b) for a claimant who has a head of household filing status[, $22,643] :
84(i) for the taxable year beginning on January 1, 2026, $28,045;
85(ii) for the taxable year beginning on January 1, 2027, 72% of the amount calculated
86in accordance with Subsection (5)(c) for a claimant who has a joint filing status,
87rounded to the nearest whole dollar;
88(iii) for the taxable year beginning on January 1, 2028, 67% of the amount calculated
89in accordance with Subsection (5)(c) for a claimant who has a joint filing status,
90rounded to the nearest whole dollar;
91(iv) for the taxable year beginning on January 1, 2029, 60% of the amount calculated
92in accordance with Subsection (5)(c) for a claimant who has a joint filing status,
93rounded to the nearest whole dollar; or
94(v) for a taxable year beginning on or after January 1, 2030, 50% of the amount
95calculated in accordance with Subsection (5)(c) for a claimant who has a joint
96filing status, rounded to the nearest whole dollar; or
97(c) for a claimant who has a joint filing status, [$30,190] $37,392.
  -3-
 5th Sub. (Salmon) H.B. 210  03-02 10:56
98   (5)(a) For a taxable year beginning on or after January 1, [2022] 2027, the commission
99shall increase or decrease annually the [following dollar amounts] dollar amount
100listed in Subsection (4)(a) by a percentage equal to the percentage difference between
101the consumer price index for the preceding calendar year and the consumer price
102index for calendar year [2020:] 2025.
103[(i) the dollar amount listed in Subsection (4)(a); and]
104[(ii) the dollar amount listed in Subsection (4)(b).]
105(b) After the commission increases or decreases the dollar [amounts] amount listed in
106Subsection (4)(a) as required by Subsection (5)(a), the commission shall round [those]
107that dollar [amounts listed in Subsection (5)(a)] amount to the nearest whole dollar.
108(c) After the commission rounds the dollar [amounts] amount as required by Subsection
109(5)(b), the commission shall increase or decrease the dollar amount listed in
110Subsection (4)(c) so that the dollar amount listed in Subsection (4)(c) is equal to the
111product of:
112(i) the dollar amount listed in Subsection (4)(a); and
113(ii) two.
114(d) For purposes of Subsection (5)(a), the commission shall calculate the consumer price
115index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
116   (6)(a) For a taxable year beginning on or after January 1, 2022, the commission shall
117increase annually the Utah personal exemption amount listed in Subsection [(1)(g)]
118(1)(h) by a percentage equal to the percentage by which the consumer price index for
119the preceding calendar year exceeds the consumer price index for calendar year 2020.
120(b) After the commission increases the Utah personal exemption amount as described in
121Subsection (6)(a), the commission shall round the Utah personal exemption amount
122to the nearest whole dollar.
123(c) For purposes of Subsection (6)(a), the commission shall calculate the consumer price
124index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
125Section 2. Section 59-10-1019 is amended to read:
12659-10-1019 . Definitions -- Nonrefundable retirement tax credit.
127   (1) As used in this section:
128(a) "Eligible claimant" means a claimant, regardless of whether that claimant is retired,
129who was born on or before December 31, 1952.
130(b) "Head of household filing status" means the same as that term is defined in Section
13159-10-1018.
  -4-
 03-02 10:56  5th Sub. (Salmon) H.B. 210
132(c) "Joint filing status" means the same as that term is defined in Section 59-10-1018.
133(d) "Married filing separately status" means a married individual who:
134(i) does not file a single federal individual income tax return jointly with that married
135individual's spouse for the taxable year; and
136(ii) files a single federal individual income tax return for the taxable year.
137(e) "Modified adjusted gross income" means the sum of the following for an eligible
138claimant or, if the eligible claimant's return under this chapter is allowed a joint filing
139status, the eligible claimant and the eligible claimant's spouse:
140(i) adjusted gross income for the taxable year for which a tax credit is claimed under
141this section;
142(ii) any interest income that is not included in adjusted gross income for the taxable
143year described in Subsection (1)(e)(i); and
144(iii) any addition to adjusted gross income required by Section 59-10-114 for the
145taxable year described in Subsection (1)(e)(i).
146(f) "Single filing status" means a single individual who files a single federal individual
147income tax return for the taxable year.
148   (2) Except as provided in Section 59-10-1002.2 and Subsections (3) and (4), each eligible
149claimant may claim a nonrefundable tax credit of $450 against taxes otherwise due
150under this [part] chapter.
151   (3) An eligible claimant may not:
152(a) carry forward or carry back the amount of a tax credit under this section that exceeds
153the eligible claimant's tax liability for the taxable year; or
154(b) claim a tax credit under this section for a taxable year if a tax credit under Section
15559-10-1042 or 59-10-1043 is claimed on the claimant's return for the same taxable
156year.
157   (4)(a) [The] For the taxable year beginning on January 1, 2026, the tax credit allowed by
158Subsection (2) claimed on a return filed under this [part] chapter shall be reduced by
159$.025 for each dollar by which modified adjusted gross income for purposes of the
160return exceeds:
161[(a)] (i) for a federal individual income tax return that is allowed a married filing
162separately status, $16,000;
163[(b)] (ii) for a federal individual income tax return that is allowed a single filing
164status, [$25,000] $24,400;
165[(c)] (iii) for a federal individual income tax return that is allowed a head of
  -5-
 5th Sub. (Salmon) H.B. 210  03-02 10:56
166household filing status, [$32,000] $31,200; or
167[(d)] (iv) for a [return under this chapter] federal individual income tax return that is
168allowed a joint filing status, $32,000.
169      (b) For the taxable year beginning on January 1, 2027, the tax credit allowed by
170Subsection (2) claimed on a return filed under this chapter shall be reduced by $.025
171for each dollar by which modified adjusted gross income for purposes of the return
172exceeds:
173(i) for a federal individual income tax return that is allowed a married filing
174separately status, $16,000;
175(ii) for a federal individual income tax return that is allowed a single filing status,
176$23,200;
177(iii) for a federal individual income tax return that is allowed a head of household
178filing status, $29,600; or
179(iv) for a federal individual income tax return that is allowed a joint filing status,
180$32,000.
181      (c) For the taxable year beginning on January 1, 2028, the tax credit allowed by
182Subsection (2) claimed on a return filed under this chapter shall be reduced by $.025
183for each dollar by which modified adjusted gross income for purposes of the return
184exceeds:
185(i) for a federal individual income tax return that is allowed a married filing
186separately status, $16,000;
187(ii) for a federal individual income tax return that is allowed a single filing status,
188$20,800;
189(iii) for a federal individual income tax return that is allowed a head of household
190filing status, $26,700; or
191(iv) for a federal individual income tax return that is allowed a joint filing status,
192$32,000.
193      (d) For the taxable year beginning on January 1, 2029, the tax credit allowed by
194Subsection (2) claimed on a return filed under this chapter shall be reduced by $.025
195for each dollar by which modified adjusted gross income for purposes of the return
196exceeds:
197(i) for a federal individual income tax return that is allowed a married filing
198separately status, $16,000;
199(ii) for a federal individual income tax return that is allowed a single filing status,
  -6-
 03-02 10:56  5th Sub. (Salmon) H.B. 210
200$17,700;
201(iii) for a federal individual income tax return that is allowed a head of household
202filing status, $22,700; or
203(iv) for a federal individual income tax return that is allowed a joint filing status,
204$32,000.
205(e) For a taxable year beginning on or after January 1, 2030, the tax credit allowed by
206Subsection (2) claimed on a return filed under this chapter shall be reduced by $.025
207for each dollar by which modified adjusted gross income for purposes of the return
208exceeds:
209(i) for a federal individual income tax return that is allowed a single filing status, a
210head of household filing status, or a married filing separately status, $16,000; or
211(ii) for a federal individual income tax return that is allowed a joint filing status,
212$32,000.
213Section 3. Section 59-10-1047 is amended to read:
21459-10-1047 . Nonrefundable child tax credit.
215   (1) As used in this section:
216(a) "Joint filing status" means the same as that term is defined in Section 59-10-1018.
217(b) "Head of household filing status" means the same as that term is defined in Section
21859-10-1018.
219(c) "Married filing separately status" means a married individual who:
220(i) does not file a single federal individual income tax return jointly with that married
221individual's spouse for the taxable year; and
222(ii) files a single federal individual income tax return for the taxable year.
223(d) "Modified adjusted gross income" means the sum of the following for a claimant or,
224if the claimant's federal individual income tax return is allowed a joint filing status,
225the claimant and the claimant's spouse:
226(i) adjusted gross income for the taxable year for which a tax credit is claimed under
227this section;
228(ii) any interest income that is not included in adjusted gross income for the taxable
229year described in Subsection (1)(d)(i); and
230(iii) any addition to adjusted gross income required by Section 59-10-114 for the
231taxable year described in Subsection (1)(d)(i).
232(e) "Qualifying child" means an individual:
233(i) with respect to whom the claimant is allowed to claim a tax credit under Section
  -7-
 5th Sub. (Salmon) H.B. 210  03-02 10:56
23424, Internal Revenue Code, on the claimant's federal individual income tax return
235for the taxable year; and
236(ii) who is under six years old on the last day of the claimant's taxable year.
237(f) "Single filing status" means a single individual who files a single federal individual
238income tax return for the taxable year.
239   (2) Subject to Section 59-10-1002.2, a claimant may claim a nonrefundable tax credit of
240$1,000 for each qualifying child.
241   (3) A claimant may not carry forward or carry back the amount of the tax credit that
242exceeds the claimant's tax liability.
243   (4)(a) For the taxable year beginning on January 1, 2026, the tax credit allowed by
244Subsection (2) claimed on a return filed under this chapter shall be reduced by $.10
245for each dollar by which modified adjusted gross income for purposes of the return
246exceeds:
247(i) for a federal individual income tax return that is allowed a married filing
248separately status, $27,000;
249(ii) for a federal individual income tax return that is allowed a single filing status or a
250head of household filing status, $41,900; or
251(iii) for a federal individual income tax return that is allowed a joint filing status,
252$54,000.
253(b) For the taxable year beginning on January 1, 2027, the tax credit allowed by
254Subsection (2) claimed on a return filed under this chapter shall be reduced by $.10
255for each dollar by which modified adjusted gross income for purposes of the return
256exceeds:
257(i) for a federal individual income tax return that is allowed a married filing
258separately status, $27,000;
259(ii) for a federal individual income tax return that is allowed a single filing status or a
260head of household filing status, $39,800; or
261(iii) for a federal individual income tax return that is allowed a joint filing status,
262$54,000.
263(c) For the taxable year beginning on January 1, 2028, the tax credit allowed by
264Subsection (2) claimed on a return filed under this chapter shall be reduced by $.10
265for each dollar by which modified adjusted gross income for purposes of the return
266exceeds:
267(i) for a federal individual income tax return that is allowed a married filing
  -8-
 03-02 10:56  5th Sub. (Salmon) H.B. 210
268separately status, $27,000;
269(ii) for a federal individual income tax return that is allowed a single filing status or a
270head of household filing status, $35,800; or
271(iii) for a federal individual income tax return that is allowed a joint filing status,
272$54,000.
273(d) For the taxable year beginning on January 1, 2029, the tax credit allowed by
274Subsection (2) claimed on a return filed under this chapter shall be reduced by $.10
275for each dollar by which modified adjusted gross income for purposes of the return
276exceeds:
277(i) for a federal individual income tax return that is allowed a married filing
278separately status, $27,000;
279(ii) for a federal individual income tax return that is allowed a single filing status or a
280head of household filing status, $30,500; or
281(iii) for a federal individual income tax return that is allowed a joint filing status,
282$54,000.
283(e) For a taxable year beginning on or after January 1, 2030, the tax credit allowed by
284Subsection (2) claimed on a return filed under this chapter shall be reduced by $.10
285for each dollar by which modified adjusted gross income for purposes of the return
286exceeds:
287(i) for a federal individual income tax return that is allowed a single filing status, a
288head of household filing status, or a married filing separately status, $27,000; or
289(ii) for a federal individual income tax return that is allowed a joint filing status,
290$54,000.
291   [(4) The tax credit allowed by Subsection (2) claimed on a return filed under this part shall
292be reduced by $.10 for each dollar by which modified adjusted gross income for
293purposes of the return exceeds:]
294[(a) for a federal individual income tax return that is allowed a married filing separately
295status, $27,000;]
296[(b) for a federal individual income tax return that is allowed a single filing status or
297head of household filing status, $43,000; and]
298[(c) for a federal individual income tax return that is allowed a joint filing status,
299$54,000.]
300Section 4. Effective Date.
301   This bill takes effect on May 6, 2026.
  -9-
 5th Sub. (Salmon) H.B. 210  03-02 10:56
302Section 5. Retrospective operation.
303   This bill has retrospective operation for a taxable year beginning on or after January 1,
304   2026.
  - 10 -