Free 2001 TC-40 Instructions - Utah

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Thinking of a better tomorrow today...

nternet Filing. Let a qualified software provider guide you step-by-step through filing your federal and state returns on-line. Even if you don't have a PC in your home, computers are available in your community at libraries and other civic centers.

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check to arrive in the mail or standing in long lines at your bank or credit union. Have your refund deposited directly to the account you choose, regardless of what method you choose to file your return. (See instructions on page 15.)

ed/State e-Filing. File your federal and state returns at the same time with a qualified tax preparer. Returns are filed automatically and refunds are mailed or deposited within days.

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irect Deposit. Imagine ­ no more waiting for your

elefile. If you received a Telefile booklet in the mail, you can probably telefile using a touch-tone phone or the Internet. If you telefile on the Internet, you can even pay electronically.

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www.incometax.utah.gov
How secure is my tax information if I Internet File? Very secure. The on-line tax preparation firms use modern encryption technology that "scrambles" your private tax information as it travels across the Internet before it's decoded at the other end.

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If I use Direct Deposit for my state refund, how soon will my refund be deposited? We cannot guarantee a definite deposit time; however, Direct Deposit eliminates paper-check processing time and, in most cases, results in faster refunds. Check with your bank or credit union to verify the deposit of your refund.

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Do I need to purchase special software to Internet File? Not necessarily. Some e-file websites let you file your returns directly on-line without purchasing software (the only cost is a processing fee, which may be waived if your income is below a certain amount). Other tax preparation software packages must be purchased and loaded on your computer.

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Can I still use e-file options if I owe taxes this year? Yes. You may file your taxes as early as you wish, so long as you pay any taxes owed by the April due date. Remember to always write your name, social security number and tax year on your check or money order.

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Do I have to telefile my federal taxes to take advantage of Utah's Telefile system? No. However, you do need to complete your federal income tax return before you can complete the Utah Telefile Record.

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Can I pay taxes electronically?

If you use the Internet to telefile, you can pay electronically when you file your return.

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How do I know if I qualify to telefile?

If you receive a Utah Telefile booklet in the mail, you can probably telefile your income tax return if your circumstances haven't greatly changed since last year.

How can I get more information about efiling options? Visit our website at www.incometax.utah.gov. It contains information about electronic filing options and links to software providers, the Tax Commission homepage and the IRS.

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Things You Should Know
Utah State Tax Commission 210 North 1950 West Salt Lake City, Utah 84134 801-297-2200 1-800-662-4335 If outside the Salt Lake area 801-297-6700 Automated ordering for Utah forms www.tax.ex.state.ut.us
TDD: If you need an accommodation under the Americans with Disabilities Act, contact the Tax Commission at (801) 297-3811 or Telecommunications Device for the Deaf (801) 297-3819. Please allow three working days for a response.

WHO MUST FILE
1. Every Utah resident who is required to file a federal income tax return; 2. Every non or part-year resident having income from Utah sources who is required to file a federal return; 3. Taxpayers requesting a refund of any overpayment of income tax regardless of the amount of gross income; or 4. Every resident or nonresident with Utah income that meets the following requirements, even if a federal return is not required.
Marital Status at end of 2001: Single Filing Status: Single Head of Household Head of Household At end of 2001 you were: Under 65 65 or older Under 65 65 or older Under 65 65 or older And gross income is at least: $6,725 $7,825 $8,825 $9,925 $8,825 $9,925

Hours: Monday - Friday, 8:00 a.m. to 5:00 p.m. Saturday and extended service hours will be announced
IRS assistance is available at the Tax Commission building. www.irs.gov

1-800-829-4477 Ordering Federal forms

What's new for 2001?
· · · Tax Bracket Adjustments: The Utah Legislature adjusted the state income tax brackets for 2001. These adjustments reduce some taxpayers' taxes. See page 17. Tax Credit For Special Needs Adoptions: A refundable tax credit for adopting special needs children (line 35d) is available. See page 14. Low Income Housing Tax Credit: The amount of credit allocated to each taxpayer is determined by the building project owner. Form TC-40LI has been modified. A new form, TC-40LIS, must be filed by the project owner. See page 13. Clean Fuel Vehicle Tax Credit: The amount of the credit allowable for each qualified vehicle has increased. See page 12. Renewable Energy System Tax Credit: An individual no longer needs to be a Utah resident to claim the credit. See page 12. Refunds Applied to 2002 Income Tax Liability: You may apply all or part of your refund to your 2002 income tax liability. See page 15. This graphic will direct you to more complete information on the Internet and in publications. Pubs can be viewed online or ordered on the forms hotline (number above).

Married with dependent child, living apart from spouse during last 6 months of 2001 Married, living with spouse at end of 2001 or up to date spouse died

Married joint return

Under 65 (both) 65 or older (one spouse) 65 or older (both spouses)

$11,950 $12,850 $13,750 $2,175 $2,175

· · ·

Married, not living with spouse at end of 2001 or up to the date spouse died

Married separate return Married joint or separate return

Any age Any age

If you must file a state return, first complete a federal return as if you were filing with the IRS - information is needed from the federal return to complete the state return. If you are required to file a federal return and take the blind exemption, you must file a state return, even if your federal tax is zero.

EXTENSION OF TIME TO FILE
TIP: This is NOT an extension of time to pay your taxes ­ it is an extension of time to file your tax return. You are automatically allowed an extension of up to six months to file your return without filing an extension form. However, if the prepayment requirements (see next paragraph) are not met on or before the original due date (April 15th) penalties will be assessed. (See "Penalties and Interest" instructions on page 3.) All extension returns must be filed by October 15, 2002.

VOLUNTEER INCOME TAX ASSISTANCE (VITA)
VITA volunteers provide tax preparation service to lowincome, elderly, and disabled taxpayers. Some VITA sites have the capability of filing electronically. Contact the IRS by calling 1-800-829-1040 to find the site nearest you.

WHEN TO FILE AND PAY
TIP: Quarterly prepayments are NOT required. You must file your return and pay any income tax due: 1. By April 15, 2002, if you file on a 2001 calendar year basis (tax year ends December 31, 2001); or, 2. By the 15th day of the fourth month following the close of the fiscal year, if you file on a fiscal-year basis. All Utah income taxes for the year 2001 must be paid by the due date to avoid penalties and interest. If your return is not filed on time, you may be subject to penalties and interest. (See "Penalties and Interest" instructions on page 3.)

PREPAYMENT REQUIREMENTS FOR FILING EXTENSION
TIP: All prepayments are due on or before April 15, 2002. The required prepayment must equal: · · Ninety percent (90%) of the tax due for 2001; or One hundred percent (100%) of your 2000 Utah tax liability. Full year residents see line 22 of your 2000 Utah return. Non or part-year residents see line 23 of your 2000 Utah return.

A prepayment may be in the form of withholding (W-2, TC-675R, TC-675M, 1099R, etc.), tax credit, and/or payment made on or before the tax due date using form TC-546,

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"Prepayment of Income Tax." Interest will be assessed on unpaid tax from the filing due date until the tax is paid in full. Penalties may also be assessed. does not apply to military personnel or their spouses who are in Utah on military assignment, unless they are Utah residents. All income received during the period of Utah residency is taxable in Utah, regardless of the source of that income.

PENALTIES AND INTEREST
PENALTIES Utah law provides for uniform tax penalties for failure to file tax returns, failure to pay tax due, and failure to file information returns or supporting schedules. The penalty for failure to file a tax due return by the due date is the greater of $20 or 10 percent of the unpaid tax. If a tax balance is still unpaid 90 days after the due date, a second penalty of $20 or 10 percent of the unpaid tax, whichever is greater, will be added for failure to pay timely. The penalty for failure to pay tax due as reported on a timely filed return, or within 30 days of a notice of deficiency, is $20 or 10 percent of the tax due, whichever is greater. The penalty for underpayment of an extension prepayment is 2 percent per month of the unpaid tax during the extension period. If the return is not filed by the extension due date, failure to file and failure to pay penalties will apply, as if the extension had not been granted. For a list of additional penalties that may be imposed, refer to UCA §59-1-401. INTEREST (In addition to penalties due) Interest will be assessed at the rate prescribed by law from the original due date until any outstanding liability is paid in full. The interest rate for most taxes and fees administered by the Tax Commission for the 2002 calendar year is 6 percent. For information on applicable interest rates, taxpayers may request form TC-15 by calling or writing the Tax Commission. The Tax Commission will bill the taxpayer if any penalty or interest is owed.

PART-YEAR RESIDENT DEFINED
A part-year resident is an individual who is domiciled in Utah for part of the year and is domiciled outside Utah for part of the year. All income received during the period of Utah residency by a part-year resident is taxable in Utah, regardless of the source of that income. Income from Utah sources is taxable in Utah during the period of nonresidency.

NONRESIDENT DEFINED
A nonresident individual is one who was not in Utah or was in Utah for temporary purposes for less than 183 days during the taxable year. Income received by a nonresident from Utah sources is taxable in Utah.

FILING FOR A DECEASED TAXPAYER
A return must be filed for a deceased individual who would have been required to file an income tax return. The personal representative, executor, administrator, legal representative, or survivor must sign and file the final return and any other returns still due. Persons, other than surviving spouse, claiming a refund on behalf of the deceased, must attach form TC-131, "Statement of Person Claiming Refund Due a Deceased Taxpayer," to the front of the return. Also, see pages 5 and 16 for additional instructions for deceased taxpayers.

SPECIAL INSTRUCTIONS
www.tax.ex.state.ut.us Pub 49 - Special Instructions for when one spouse is a full-year resident and the other is a nonresident

DOMICILE DEFINED
"Domicile" means the place where an individual has a true, fixed, permanent home and principal establishment, and to which place he has (whenever he is absent) the intention of returning. It is the place in which a person has voluntarily fixed the habitation of himself and family, not for a mere special or temporary purpose, but with the present intention of making a permanent home (28 C.J.S. Domicile §1). After domicile has been established, two things are necessary to create a new domicile: first, an abandonment of the old domicile; and second, the intention and establishment of a new domicile. The mere intention to abandon a domicile once established is not of itself sufficient to create a new domicile; for before a person can be said to have changed his domicile, a new domicile must be shown.

To file using Special Instructions, one spouse must be a fullyear Utah resident and the other spouse must be a nonresident. If either spouse is a part-year resident they cannot file using Special Instructions. Couples who qualify to use Special Instructions may file a federal return as married filing joint and file Utah returns as married filing separate. Couples who do not qualify to use Special Instructions must file the Utah return using the same filing status as the federal return. See Pub 49 for detailed instructions and examples on how to calculate tax using Special Instructions.

UTAH RESIDENT DEFINED
A Utah resident is an individual who: 1. Is domiciled in Utah for the entire year, even if temporarily outside of Utah for an extended period of time ­ even years in certain situations; 2. Is domiciled in Utah for any period of time during the taxable year, but only for the duration of that period; 3. Even though domiciled outside Utah, maintains a permanent place of abode within the state and spends a total of 183 days or more of the taxable year within Utah. This

MILITARY PERSONNEL, NATIVE AMERICANS, AND STUDENTS
TIP: If one spouse is a resident of Utah and the other spouse is a nonresident, you may qualify to file using "Special Instructions." Special rules apply to military personnel, Native Americans, and students, as follows: Military Personnel 1. Residents: Utah residents who enter military service do not lose their Utah residency or domicile solely by being

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absent due to military orders. They still must file a resident income tax return in Utah on all income, regardless of the source. If income tax is required to be paid to another state on nonmilitary income, a credit may be allowed for the tax paid to the other state. If taxes are owed to another state, refer to line 31 of your state income tax return and complete state form TC-40A, PART 1 included in this booklet. 2. Nonresidents: Nonresidents stationed in Utah solely due to military orders are not subject to tax on their military pay. However, nonresident personnel or members of their family residing in Utah with earned income from Utah sources, other than active military service pay, are required to file a Utah income tax return and pay any tax due. 3. Married couples: The spouse of a person in active military service is generally considered to have the military person's domicile and is subject to the same income tax laws and rules that apply to the military person. If one spouse is a full-year Utah resident and the other spouse is a nonresident, the couple may file separate Utah income tax returns, even though they filed a joint federal income tax return. See "Special Instructions" on page 3. Native Americans 1. Residents: Native Americans who are domiciled and earn income in Utah should file a Utah income tax return. · Enrolled members of a Native American tribe or nation in Utah, who live and work on the reservation on which they are enrolled, are exempt from Utah income tax on income earned on the reservation. · Enrolled members of the Ute Tribe who work on the Uintah and Ouray Reservation and live on land removed from that reservation under Hagen v. Utah (510 U.S. 399 (1994)) are exempt from Utah income tax on income earned on the reservation. 2. Nonresidents: Nonresident Native Americans who are not domiciled on a reservation within Utah, but earn income from Utah sources, must file a Utah income tax return and pay any tax due. Students 1. Residents: A Utah resident, who is a student at a nonUtah school (full or part-time) is required to file a Utah return and pay tax on income, regardless of the source. If income tax is required to be paid to another state on income that is also taxed by Utah, a credit may be allowed for the tax paid to the other state. To claim credit for taxes paid to another state, refer to line 31 of your Utah income tax return and complete Utah form TC-40A, PART 1 included in this booklet. Attach a signed copy of the other state's return with your Utah return. 2. Nonresidents: A nonresident student who is attending a Utah school is required to file a Utah state income tax return and pay Utah tax on income, such as wages, rental income, business income, etc. earned from Utah sources.

AMENDED RETURNS
To amend, use the tax form and instructions for the year you are amending. Amend your return promptly if: · An error is discovered on your state or federal return after it has been filed; or · Your federal return is audited or adjusted by the IRS and the IRS audit or adjustment affects your state return. You must amend your state return within 90 days of the IRS's final determination. If you are unsure whether or not your state taxes are affected by an audit or adjustment, contact the Tax Commission. Generally, an amended return must be filed within three years following the date the original return was due to qualify for a refund or a credit. An amended return filed before the due date is still considered filed on the due date. If an amended return must be filed based on changes made by the IRS, a claim for refund or credit must be made within two years after a Utah amended return was required to be filed. How to Amend a 2001 Utah Income Tax Return A. Check the "AMENDED" box located at the top of the return. B. Enter the number in the box from the list below that best corresponds to your "REASON FOR AMENDING." Reasons For Amending (enter number on return) 1 You filed an amended return with the IRS (attach a copy of your amended federal return). 2 You made an error on your state return (attach an explanation of the error). 3 Your tax calculation was changed by an IRS audit and/ or adjustment (attach a copy of the IRS adjustment). 4 You had a net operating loss. Utah allows net operating losses to be carried back two years and carried forward 20 years on state individual income tax returns. If your amended return is the result of a carryback net operating loss, complete an income tax return for each year you are amending (attach a copy of your amended federal return). 5 Other (attach explanation to return). C. Complete the return by entering the corrected figures.
D. Enter other amounts shown on your original return. If you received a refund on your original return, enter the amount of previous refunds on line 28 of the 2001 amended return. If you paid with the original return or made subsequent payments of the tax prior to filing the amended return, enter the total previous payments on line 33 of the 2001 return. Contributions on line 27 cannot be changed after the original return is filed.

ROUNDING OFF TO WHOLE DOLLARS
Round off cents to the nearest whole dollar. Round down if cents are under 50 cents; round up if cents are 50 cents and above.

RECORDKEEPING AND DOCUMENTATION
Keep copies of any receipts, state forms, worksheets, and other documentation to support any deductions, exemptions, and credits you have claimed on your return.

Line-by-Line Instructions
NAME, ADDRESS, SOCIAL SECURITY NUMBER, AND PREPRINTED LABEL
PREPRINTED LABEL If you received your income tax booklet by mail there should be a preprinted label located in the center of the booklet. Attach the label to the income tax return over the name and address area. Make sure you include your daytime and evening telephone numbers. If any part of the label is incorrect, do not use the label - type or print your name, address, Social Security Number, and telephone numbers on the return. DECEASED TAXPAYER Do not use the mailing label if you are filing for a taxpayer who died during the tax year (including a deceased spouse). Type or print the deceased individual's name and Social Security Number and your mailing address and telephone numbers. Check the box, "If died in 2001 or 2002," if applicable. See pages 3 and 16 for additional information. QUALIFICATIONS FOR DISABLED EXEMPTION Infants and Toddlers with Disabilities (Ages 0 through 2 years) A representative from either the State Department of Health or a local early intervention program is authorized to approve this credit. For additional information, contact the Utah Department of Health, Early Intervention Program, P.O. Box 144720, 44 N. Medical Dr., Salt Lake City, UT 84114-4720, telephone (801) 584-8226 or 1-800-961-4226. School-Age Persons with Disabilities (Ages 3 through 21 years) Children eligible for the exemption must be diagnosed by a local school district (under guidelines adopted by the State Board of Education), as having a disability classified as: autism, deafness, developmental delay (ages 3 through 7), dual sensory impairment (deaf/blind), hearing impairment, intellectual disability, multidisability, orthopedic impairment, other health impairment, traumatic brain injury, or visual impairment, AND must not be currently receiving residential services from the Division of Services to People with Disabilities (Department of Human Services) or from the school for the deaf and blind. Students with learning disabilities, behavior disorders, or communication disorders are not eligible for this exemption. Questions concerning programs for children may be directed to your local school district, local school, or the Utah State Office of Education, 250 E. 500 S., Salt Lake City, Utah 84111, telephone (801) 538-7700. Adults With Disabilities (Age 18 and older) The eligible adult for this exemption must: · Be 18 years or older; · Be eligible for services under Title 62A, Chapter 5 (Services to People with Disabilities); · Not be enrolled in an education program for students with disabilities authorized under Section 53A-15-301; and · Not be enrolled in a school established under Title 53A, Chapter 25 (Schools for the Deaf and Blind). A support coordinator from the Division of Services for People with Disabilities is authorized to sign the form TC-40D to certify that the adult with disabilities is either enrolled in division services or qualifies for this exemption. A primary care physician or licensed psychologist familiar with the adult's disabilities may also sign form TC-40D, certifying the person qualifies for this exemption. Questions concerning programs for adults may be directed to the Utah Department of Human Services, Division of Services for People with Disabilities, 120 N. 200 W., Room 411, Salt Lake City, Utah 84103, telephone (801) 538-4200. Form TC-40D may be obtained from the Tax Commission or one of the agencies noted above.

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1.

FILING STATUS

If you filed a joint federal return, you must file a joint state return unless the "Special Instructions" apply.
www.tax.ex.state.ut.us Pub 49 - Special Instructions for when one spouse is a full-year resident and the other is a nonresident

Check the box that matches the filing status shown on your federal return: 1040 and 1040A, lines 1 through 5 1040EZ and TeleFile, there is no federal filing status listed. Select a filing status that corresponds to your federal filing status.

2.
a.

EXEMPTIONS
Tip: For lines 2a through 2c, enter the same number of exemptions claimed on your federal return.

Enter a "1" if you claim yourself. If someone else, such as a parent, is claiming you as their dependent on their federal return, you must claim "0." If you checked "YES" on line 5 of your 1040EZ or line B of your federal telefile record, enter "0." b. Enter a "1" if you claimed your spouse as an exemption on your federal return. If someone else, such as a parent, is claiming your spouse as their dependent on their federal return, you must enter "0." c. Enter the number of other dependents claimed on line 6c of the federal return 1040 or 1040A. d. Qualified disabled dependent exemption. Taxpayers claiming this exemption must complete state form TC-40D, "Disabled Exemption Verification," for each exemption claimed (explanation follows). Attach new TC-40D(s) to your return each year the exemption is claimed. Enter the total disabled exemptions. To qualify for this exemption, the individual must be claimed as a dependent on your tax return. Neither the taxpayer nor the taxpayer's spouse qualifies for this exemption. e. Add all exemptions and enter the total.

3.

ELECTION CAMPAIGN FUND

If your Utah income tax liability on line 22 (line 23 if non or part-year resident) of your Utah income tax return is $2 or more ($4 if married filing jointly), you may designate $2 to be distributed to the campaign fund for the party of your choice. If this is a joint return, your spouse may also designate $2 to the party of his or her choice. This will not reduce your refund or increase the amount of taxes you owe.

6 4. FEDERAL ADJUSTED GROSS INCOME 8.
Enter your federal adjusted gross income (FAGI) from your federal return: 1040, line 33 1040EZ, line 4 1040A, line 19 TeleFile Tax Record, line I

ADDITIONS TO INCOME FOR MSA, UESP AND REIMBURSED ADOPTION EXPENSES

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STATE INCOME TAX ITEMIZED ON 2001 FEDERAL SCHEDULE A

Tip: If you did not itemize your deductions on federal return 1040, leave blank. If you filed federal form 1040 and you claimed any income tax paid to Utah, another state, the District of Columbia, or possession of the United States as an itemized deduction on line 5 of federal Schedule A, enter an amount as follows: A. For Federal Adjusted Gross Income LESS than or equal to $132,950 (or $66,475 for married filing separate) on line 4 on this return, enter the state income tax itemized from your federal Schedule A, line 5. B. For Federal Adjusted Gross Income GREATER than $132,950 (or $66,475 for married filing separate) on line 4 on this return, complete the following worksheet to determine the amount to enter.
1. 2. 3. WORKSHEET Add lines 4, 9, 14, 18, 19, 26, and 27 from federal Schedule A Add lines 4, 13, and 19, plus any gambling losses included on line 27 of federal Schedule A Subtract worksheet line 2 from line 1. If your answer is zero, stop here. Enter the amount from federal Schedule A, line 5 on line 5 of your Utah return Enter the amount from line 28 on federal Schedule A Subtract line 4 from line 1 Subtract line 5 from line 3 Divide line 6 by line 3 (decimal rate) Multiply the amount on line 5 of federal Schedule A by the rate on line 7. Enter amount here and on line 5 of your Utah return

Medical Savings Account (MSA) Utah residents only If you claimed MSA amounts on federal form 1040, you CANNOT claim MSA amounts on lines 8 or 16 of your state return. The account holder of an MSA should receive a "Statement of Withholding for Utah Medical Savings Account," form TC-675M, from the account administrator each year contributions are made. Include on this line the sum of lines 8 and 9 from form TC-675M. Attach a copy of form TC-675M to the return. Utah Educational Savings Plan (UESP) An account holder (participant) in the Utah Educational Savings Plan should receive a "Statement of Withholding for Utah Educational Savings Plan," form TC-675H, from the UESP trustee. Enter the amount from line 3 of form TC-675H. Attach a copy of form TC-675H to the return. If you have any questions about UESP, call 1-800-418-2551. Reimbursed Adoption Expenses Include on this line any adoption expense previously deducted from income for which you received reimbursement from your insurance company, a public welfare agency, or a private charitable organization. Check the applicable boxes on line 8 and enter the amounts for each box checked. Add together MSA, UESP and reimbursed adoption expenses and enter the total on line 8.

$ _________ _________

9.
_________ _________ _________ _________ _________

TOTAL ADJUSTED INCOME STANDARD/ITEMIZED DEDUCTIONS

Add lines 4 through 8.

4. 5. 6. 7. 8.

10.

Itemized Deductions: If you itemized your deductions on your federal return, you must use the itemized deduction on your state return. Enter the itemized deduction amount from 1040, Schedule A, line 28. Standard Deductions: The standard deduction is located on the following federal forms: 1040, line 36 1040A, line 22 Federal Telefile Tax Record, line J 1040EZ, if you checked "Yes" on line 5 of federal form 1040EZ, enter the amount from line E, of the "worksheet for dependents who checked Yes on line 5" worksheet located on the back of form 1040EZ. If you are single and checked "No" on line 5, enter $4,550. If you are married filing joint and both checked "NO" on line 5, enter $7,600.

$___________

6.

LUMP-SUM DISTRIBUTION

Tip: If you did not file your federal return using form 4972, leave blank. If you received a lump sum distribution and filed federal form 4972, add any amount shown on Part II, line 6 and the amount shown on Part III, line 10 of federal form 4972. Shared Distributions: If you shared a lump sum distribution, first multiply the amount on line 10 of form 4972 by the distribution percentage shown in box 9a on your 1099R form. Then add the amount shown on Part II, line 6 on form 4972. Attach a copy of federal form 4972 and any 1099R forms showing the distribution.

11.

PERSONAL EXEMPTIONS

7.

STATE TAXES ALLOCATED FROM AN ESTATE OR TRUST

If state taxes were allocated to you by the fiduciary, include that amount on this line. If a state tax refund was allocated to you by the fiduciary, include that amount as a negative number on this line.

The Utah personal exemption is $2,175 per person (75 percent of the federal personal exemption). If your federal adjusted gross income from line 4 on this return is less than or equal to the amount in the following AGI TABLE (page 7) for your filing status, multiply $2,175 by the number of exemptions claimed in box 2e. Enter the amount on line 11. If your federal adjusted gross income on line 4 exceeds the AGI TABLE (page 7) amount for your filing status, you are

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subject to a reduced personal exemption amount. Multiply your federal exemption amount from line 38 on federal return 1040 by 0.75 and enter the result on line 11.
AGI TABLE $ 99,725 $132,950 $166,200 $199,450 Filing Status Married-separate Single Head of household Married-joint or Qualifying widow(er)

income. Attach copies of all forms 1099R, SSA-1099, or other documentation to support this deduction. 1. Qualifying Income Qualifying income comes in the form of pensions, annuities or taxable retirement social security benefits. The deduction is only available to the taxpayer who earned the qualifying income. Pensions and annuities of one spouse that qualify as retirement income MAY NOT be divided between both spouses. The deduction is limited by adjusted gross income plus certain interest income. Complete form TC-40A, Part 2 to determine the retirement deduction allowed. For purposes of determining this deduction, pensions, annuities and taxable retirement social security benefits that meet the following criteria are considered to be "retirement income": · Paid from an annuity contract purchased under a plan, which has been contributed to by your employer and is not revocable by you, as provided under Section 404(a) of the Internal Revenue Code; · Purchased by an employee under a plan, which meets the requirements of Section 408 of the Internal Revenue Code (commonly known as "IRA" plans); · Paid by the United States, a state thereof, or the District of Columbia; · Taxable retirement social security benefits, only if included in your federal adjusted gross income. 2. Income that does NOT qualify The following are examples of income that does not qualify for the retirement deduction: · Disbursements from deferred compensation plans, such as 401K and 457 plans; · Lump sum distributions from a "retirement plan" when your employment was terminated prior to meeting your employer's normal retirement requirements; · A distribution from a "retirement plan" that was terminated by your employer. · Qualified income received by a child (or other nonspouse recipient) on behalf of a deceased employee - only the surviving spouse is entitled to this deduction.

NOTE: If your income exceeds the AGI TABLE amounts and you claim a special disabled exemption (line 2d), complete the following worksheet to determine your state exemption amount.
High Income Worksheet for Disabled Exemption 1. Federal form 1040 line 38 x 0.75 = _________ 2. Number of exemptions from federal form 1040 line 6d _________ 3. Divide line 1 by line 2. Enter result _________ 4. Number of state exemptions on line 2e _________ 5. Multiply line 3 by line 4 and enter result _________ This is your Utah exemption amount. Enter on line 11.

12.

DEDUCTION FOR ONE-HALF OF THE FEDERAL TAX

Tip: Self-employment and household employment taxes may NOT be included in this deduction. Locate the federal tax amount from the following federal forms: 1040A, add lines 30 and 36 1040EZ, line 11 Federal Telefile Tax Record, line K box titled "Tax." 1040, add lines 47, 52 and 55. NOTE: If any "Recapture Taxes" were reported on federal form 1040, they must be added to lines 47, 52 and 55. Divide the federal tax amount by two and enter the result.

13.

STATE TAX REFUND INCLUDED IN FEDERAL INCOME

Tip: If you did not itemize on your 2000 federal form 1040, leave blank. If you were required to report any state income tax refund on line 10 of your 2001 federal form 1040, you can deduct that amount on this line of your Utah return.

15.

INTEREST FROM U. S. GOVERNMENT OBLIGATIONS

14.

RETIREMENT INCOME EXEMPTION/ DEDUCTION

Complete the enclosed state form TC-40A, PART 2 to determine your allowable exemption/deduction for retirement income. A. Taxpayers age 65 or older Each taxpayer (you and/or your spouse) who was 65 or older at the end of the tax year is entitled to an income exemption of $7,500. This exemption is limited by the amount of your adjusted gross income plus certain interest income. Complete form TC-40A, Part 2 to determine the retirement exemption allowed. B. Taxpayers under age 65 TIP: Disbursements from deferred compensation plans such as 401K and 457 plans DO NOT qualify for this deduction. Each taxpayer (you and/or your spouse) who was under 65 at the end of the tax year and received retirement income may qualify for a deduction up to $4,800, but not in excess of the qualifying

Interest earned on U. S. Government obligations issued by an agency or instrumentality of the United States is exempt from state income tax. U. S. Government obligations include: · Treasury bills, · Notes, and · E, EE, H, HH and I bonds Income NOT exempt from Utah state income tax includes: · Interest or dividends from Federal National Mortgage Association (FNMA) and Government National Mortgage Association (GNMA); and · Interest on refunds from the IRS or any federal agency. For further questions about taxability of interest income, you may use the following test developed by the U. S. Supreme Court in Smith vs. Davis 323 U.S. 111 (1944) to determine if the instrument qualifies as a U. S. Government obligation. The instrument must: (1) Be a written document, (2) Bear interest,

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(3) Contain a binding promise by the U. S. Government to pay a specific sum on a specific date, and (4) Have congressional authorization to pledge the full faith and credit of the United States in support of the promise to pay. Only interest or dividend income from U. S. Government obligations included in your Federal Adjusted Gross Income is exempt from state income tax. Before entering an amount on line 15, subtract any related expenses claimed as deductions on your federal return, such as interest expense on money borrowed to purchase bonds or securities, or ordinary and necessary expenses paid or incurred in connection with producing exempt income. If the interest income is from a trust, attach a schedule to your return showing the calculation of income. Include the name, residency and federal identification number of the trust making the distribution.
www.tax.ex.state.ut.us Pub 33 - detailed instructions and examples of Interest from U. S. Obligations

family, but only if the taxpayer pays an additional premium. The taxpayer elects not to have his/her family covered by the plan, choosing instead to purchase a separate, less expensive plan for his/her spouse and children. Since the taxpayer, taxpayer's spouse and children were eligible and could have been included in the employer plan, a deduction for any premiums paid is not allowed. Example: A taxpayer is retired and is eligible to participate in a plan that is funded and maintained by the employer from which he/she retired. The plan provides coverage for the taxpayer's family, but only if the taxpayer pays an additional premium. The taxpayer cannot deduct any premiums on the state return. Example: A retired taxpayer is 65, is on Medicare and pays premiums for a Medicare B supplemental insurance plan. The taxpayer's spouse is 55 and still working. The spouse's employer offers a plan that will cover the employee and the taxpayer. The employer plan pays 80 percent of the premium costs and the employee must pay the other 20 percent. The couple elects to only cover the employed spouse under the company's plan. Since the taxpayer and spouse are both eligible under the employer plan, they cannot deduct any of the premiums paid for the company plan or paid for Medicare A or B. Example: A taxpayer and spouse, who are both 65, are covered by Medicare. They pay premiums for a Medicare B supplemental insurance policy and Medicare A premiums are deducted from their social security. They can deduct the full amount of premiums paid for both Medicare A and B. LIMITATIONS Qualified taxpayers who meet the above requirement may have their deduction limited by: 1. Premiums that are fully or partially reimbursed or funded by the federal, state, or any agency or instrumentality of the federal government or state, excluding Medicare. Example: A taxpayer is retired and is not eligible to participate in an employer provided plan. The taxpayer pays $2,000 in insurance premiums, of which $400 is reimbursed by the federal government. The taxpayer may deduct $1,600 (subtract $400 premiums that were reimbursed from $2,000 premiums paid). 2. Premiums paid for health insurance that were previously deducted on the federal return under IRC Code sections 125, 162, or 213. Example: A taxpayer is self-employed and is not eligible to participate in an employer provided plan. The taxpayer pays $5,000 in health insurance premiums. The taxpayer deducts $3,000 on federal form 1040 as a self-employed health insurance deduction, and $500 as an itemized deduction after the 7.5% limitation. The taxpayer would be able to deduct $1,500 (subtract $3,500 premiums deducted on federal form from $5,000 premiums paid).

16.

MSA AND UESP DEDUCTION

Medical Savings Account (MSA) Utah residents only If you claimed MSA amounts on federal form 1040, you CANNOT claim MSA amounts on lines 8 or 16 of your state return. The UTAH RESIDENT account holder of an MSA should receive a "Statement of Withholding for Utah Medical Savings Account," form TC-675M, from the account administrator. Include on this line the sum of lines 5 and 6 from form TC-675M. Attach a copy of form TC-675M to the return. Utah Educational Savings Plan (UESP) An account holder (participant) or beneficiary, who has received a distribution from UESP, should receive a "Statement of Withholding For Utah Educational Savings Plan," form TC-675H, from the UESP trustee. An account holder may deduct the amount from line 1 of form TC-675H and a beneficiary may deduct the amount from line 4. Attach a copy of TC-675H to the return. If you have any questions about UESP, call 1-800-418-2551. Check the applicable boxes on line 16 and enter the amounts for each box checked. Add together MSA and UESP deductions and enter the TOTAL on line 16.

17.

HEALTH CARE INSURANCE PREMIUM DEDUCTION
TIP: Premiums that were itemized or otherwise deducted in determining the federal taxable income on the federal return cannot be deducted on the Utah income tax return.

Qualified taxpayers may deduct the premiums paid by the taxpayer for health care insurance during the taxable year for the taxpayer, spouse and dependents. The deduction is subject to the requirement and limitations outlined below. REQUIREMENT To qualify, the taxpayer or taxpayer's spouse must not be eligible to participate in a plan fully or partially funded by an employer or former employer. Example: A taxpayer is eligible to participate in an employerfunded plan. The plan provides coverage for the taxpayer's

18.

LONG-TERM CARE INSURANCE PREMIUM DEDUCTION

You may only deduct amounts paid for long-term care insurance policies during 2001 to the extent the amounts paid for premiums were not deducted from your federal taxable income.

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Long-term care insurance policy means any insurance policy designed to provide coverage: · For not less than 12 consecutive months; and · For medically necessary services provided in a setting other than an acute care unit of a hospital. The term "long-term care insurance policy" includes group and individual annuities and life insurance policies or riders that provide or supplement long-term care insurance. The term also includes a policy or rider that provides for payment of benefits based upon cognitive impairment or the loss of functional capacity. Long-term care insurance does NOT include any insurance policy that is offered primarily to provide: · Basic Medicare supplement coverage, · Basic hospital expense coverage, · Basic medical-surgical expense coverage, · Hospital confinement indemnity coverage, · Major medical expense coverage, · Disability income or related asset-protection coverage, · Accident only coverage, · Specified disease or specified accident coverage, or · Limited benefit health coverage. Native American Income: An enrolled member of a Native American tribe in Utah who lives and works on the reservation on which he/she is an enrolled member is exempt from Utah income tax on the reservation income. An enrolled member of the Ute tribe who works on the Uintah and Ouray Reservation and lives on land removed from that reservation under Hagen v. Utah (510 U.S. 399 (1994)) is exempt from Utah income tax on income earned on the reservation. Enter the exempt income that is included in your federal adjusted gross income. Attach a statement giving the name of the nation or tribe and the enrolled or census number. Other: This may include equitable adjustments.

20. 21. 22.

TOTAL DEDUCTIONS UTAH 2001 TAXABLE INCOME CALCULATE YOUR INCOME TAX
IMPORTANT - PLEASE READ

19.

OTHER DEDUCTIONS

Check the applicable boxes on line 19 and enter the amounts for each box checked. Attach a schedule or explanation of any other deductions. Adoption Expenses: This deduction applies to the actual qualified adoption expenses of the birth mother, the legal guardian of the birth mother (or another acting on behalf of the birth mother), or the adoptive parents. Expenses include: · Any medical and hospital expenses of the birth mother of the adopted child that are incidental to the child's birth; · Living expenses of the birth mother (if paid by the adoptive parents as part of their adoption expenses); · Actual travel costs incurred exclusively for the purpose of completing adoption arrangements; and · Any welfare agency, child placement service, legal and other fees or costs relating to the adoption. Qualified adoption expenses may be deducted, even if the adoption process is terminated. Qualified adoption expenses must be deducted in the tax year in which the expenses are paid. Keep all personal records, forms, and worksheets to support your deduction. Railroad Retirement Pensions: If you received railroad retirement benefits paid by the Railroad Retirement Board, which have been reported on form RRB 1099 as Tier I or Tier II income, that income can be excluded from Utah taxable income. If railroad retirement pensions are deducted on line 14, do not deduct again on line 19. If you received pension payments under the Railroad Retirement Act and are required to report all or part of the amount received (Tier I, Tier II, or both) as income on lines 16b and/or 20b on federal form 1040, you may deduct that amount from Utah income. If other amounts are entered on lines 16b and/or 20b, deduct only the railroad retirement amounts reported on lines 16b and/or 20b of the federal form 1040 or lines 12b and/or 14b of 1040A.

Complete the Tax Calculation Worksheet on page 17, using the "Utah 2001 Taxable Income" amount on line 21. Use "WORKSHEET A" if you filed as Single or Married Filing Separate. Use "WORKSHEET B" if you are Head of Household, Married Filing Joint, or Qualifying Widow(er). FULL-YEAR UTAH RESIDENT - This is your Utah tax. NON OR PART-YEAR RESIDENT - This amount is used to calculate your Utah tax on line 23.

23.

NONRESIDENT AND PART-YEAR RESIDENT ONLY - TAX CALCULATED

STEP 1: Use the Tax Calculation Worksheet on page 17 to calculate the tax for line 22. Use "WORKSHEET A" if you filed as Single or Married Filing Separate. Use "WORKSHEET B" if you are Head of Household, Married Filing Joint, or Qualifying Widow(er). STEP 2: COMPLETE state form TC-40A, PART 3: Non or Part-Year Residents Only, included in this booklet. Transfer the totals from Columns A and B, line h to line 23 of the return. STEP 3: On line 23, divide the total in "Box a" by the total in "Box b" and enter the resulting decimal in "Box c" (rounding to four decimal places). STEP 4: Multiply the amount on line 22 by the decimal in "Box c" on line 23. This is your Utah tax for line 23. Attach a copy of TC-40A and a copy of your federal return to your Utah return. Keep copies for your records.

24.

UTAH USE TAX

Use tax is required on all taxable items purchased for storage, use or consumption in Utah during the filing year, if sales and use tax was not paid at the time of purchase. Purchases include amounts paid or charged for purchases made on the Internet or through catalogs. Credit is allowed for sales or use tax paid to another state, but not to a foreign country. If the tax rate in the other state is lower than Utah's tax rate, the person or consumer is required to pay the difference. If the tax rate in the other state is greater than Utah's tax rate, no sales or use tax credit or refund applies.

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Enter use tax of $400 or less. If the amount exceeds $400, the purchaser is required to obtain a sales and use tax license and to pay the use tax on a sales and use tax return. Sales and use tax rates vary throughout Utah. Use the following chart to find the tax rate for the Utah location where the merchandise was delivered, stored, used or consumed. If the city is not listed, use the county tax rate. Complete the worksheet to determine the amount of use tax due. Credit for taxes paid to another state cannot exceed the Utah tax that would otherwise be due on those items. If sales taxes were paid to more than one state, complete a worksheet for each state. Enter the sum of the use tax from each worksheet on line 24. WORKSHEET FOR COMPUTING UTAH USE TAX (Retain this worksheet for your records.)
1. 2. 3. 4. 5. Total amount of purchases subject to use tax Use tax rate (decimal from chart) Use tax (multiply line 1 by line 2) Credit for sales tax paid to another state Use tax due (line 3 less line 4) Enter ZERO if less than ZERO $___________ $___________ $___________ $___________ $__________

27.

CONTRIBUTIONS

Taxpayers may contribute to the following approved funds. Descriptions of the approved funds are provided below. NOTE: If you have a refund, contributing to a charitable fund will reduce the amount of your refund. If you owe taxes or have a "ZERO" refund, contributing to a charitable fund will increase the amount you owe. 27a. Utah Homeless Trust Fund Contribute $2 or more. Contributions provide funds to the Homeless Trust Fund for services and programs statewide to help Utahns become self-sufficient. For information, contact the Utah Dept. of Community and Economic Development, 324 S State, Suite 500, SLC, UT 84111, telephone (801) 538-8723. 27b. Kurt Oscarson Children's Organ Transplant Contribute $1 or more. Contributions provide financial assistance to the families of children in need of organ transplants. Contact the representative for the Department of Health at 7247 So. Santa Maria Circle, West Jordan UT 84084, telephone (801) 566-5356 or 243-7060. 27c. Utah Nongame Wildlife Fund Contribute $1 or more. Contributions provide funding to the Utah Division of Wildlife Resources for management, preservation, protection, and perpetuation of nongame wildlife species. For information contact the Utah Division of Wildlife Resources, 1594 W North Temple, Suite 2110, SLC, UT 84116, telephone (801) 538-4853. 27d. State Board of Regents (State Colleges and Universities) Contribute $1 or more. Contributions provide funds to the Utah State Board of Regents to help fund libraries and library equipment. Indicate to which college or university you would like your contribution applied by entering the corresponding code in the box provided. If you contribute, you must specify one of the following college or university codes.
Codes 01 College of Eastern Utah 02 Dixie College 03 S. L. Community College 04 Snow College 05 Southern Utah University Codes 06 University of Utah 07 Utah State University 08 Utah Valley State College 09 Weber State University

Use Tax Rate Chart (Effective Dec. 31, 2001)
.0600 .0700 .0600 .0625 .0600 .0625 Beaver County Beaver Box Elder County Brigham, Perry, Willard Cache County Cache Valley Transit, Hyde Park, Hyrum, Logan, Millville, Nibley, N.Logan, Providence, Richmond, River Heights, Smithfield Carbon County Price, Wellington Daggett County Davis County Duchesne County Roosevelt Emery County Green River Garfield County Boulder, Panguitch, Tropic Grand County Moab, East Green River Iron County Brian Head Juab County Nephi Kane County Kanab Millard County Morgan County Piute County Rich County Salt Lake County .0760 .0600 .0650 .0600 .0625 .0600 .0625 .0610 .0735 .0600 .0625 Alta San Juan County Monticello Sanpete County Ephraim, Gunnison Sevier County Richfield, Salina Summit County Park City Tooele County Erda, Grantsville, Lakepoint, Lincoln, Tooele City, Stansbury Park Uintah County Vernal Utah County Alpine, American Fork, Lehi, Lindon, Mapleton, Orem, Payson, Pleasant Grove, Provo, Provo Canyon, Salem, Highland, Spanish Fork, Springville, Cedar Hills Wasatch County Heber Washington Cnty Hurricane, Ivins, La Verkin, St. George, Santa Clara, Washington City Springdale Wayne County Weber County

.0600 .0625 .0600 .0650 .0600 .0625 .0575 .0750 .0700 .0800 .0600 .0775 .0600 .0775 .0600 .0625 .0675 .0775 .0575 .0600 .0600 .0600 .0660

.0650 .0675 .0600 .0625

.0600 .0625 .0600 .0625

.0750 .0600 .0650

25.

SUBTOTAL - UTAH INCOME TAX AND USE TAX
TIP: This total is NOT your tax due or refund. You MUST also complete lines 26 through 38 on the back of your return.

27e. Nonprofit School District Foundation Contribute $1 or more. Contributions provide funds to school district foundations, which are private, nonprofit entities established to promote: (1) partnership activities between schools and communities; (2) charitable giving activities that can be dedicated to specific educational programs, and (3) opportunities for scientific, educational, literary, and improvement objectives. Indicate to which school district you would like your contribution applied by entering the corresponding code in the box provided. If you contribute, you must specify one of the following school district codes.
Code 01 Alpine 02 Beaver 03 Box Elder 04 Cache 05 Carbon 06 Daggett 07 Davis 08 Duchesne 09 Emery 10 Garfield Code Code Code 11 Grand 21 Nebo 31 Sevier 12 Granite 22 N. Sanpete 32 S. Sanpete 13 Iron 23 N. Summit 33 S. Summit 14 Jordan 24 Ogden 34 Tintic 15 Juab 25 Park City 35 Tooele 16 Kane 26 Piute 36 Uintah 17 Logan 27 Provo 37 Wasatch 18 Millard 28 Rich 38 Washington 19 Morgan 29 Salt Lake 39 Wayne 20 Murray 30 San Jaun 40 Weber 41 Utah Assistive Technology Chapter

26.

ENTER AMOUNT FROM LINE 25

11 28. AMENDED RETURNS ONLY - PREVIOUS REFUNDS 32. CREDITS FOR UTAH INCOME TAXES PREPAID

This line is used only for amended returns. When filing an amended return, enter the amount of all refunds, credits, or offsets of state income tax received for the tax year being amended. Exclude refund interest from this amount. This amount is then added into your total tax and contributions.

Prepayments include payments you made using form TC-546, "Prepayment of Income Tax," and funds from previous year's refund applied as a credit to your current tax liability.

33.

29. 30.

TOTAL TAX AND CONTRIBUTIONS UTAH INCOME TAX WITHHELD

AMENDED RETURNS ONLY - PREVIOUS PAYMENTS

Enter the amount of UTAH TAX WITHHELD. Utah tax withheld is identified by the code "UT." The state abbreviation and the amount withheld are found on the following forms: · W-2, boxes 15 and 17. · 1099MISC, boxes 12 and 13. · 1099R, boxes 10 and 11. Nonresident Shareholder's Withholding Tax Credit is entered on line 35c and should not be entered on line 30.

This line should only be used for amended returns. When filing an amended return, enter the amount of tax paid with the original return and/or subsequent payments of the tax prior to filing this amended return.

34.

NONREFUNDABLE CREDITS
TIP: Nonrefundable credits can bring your income tax to zero, but cannot result in a refund.

IMPORTANT- PLEASE READ UTAH RESIDENTS: If you are a full-year Utah resident, the sum of your nonrefundable credits cannot be greater than the amount on line 22 less line 31 (subtract line 31 from line 22).

31.

CREDIT FOR INCOME TAXES PAID TO ANOTHER STATE (NONRESIDENTS DO NOT QUALIFY)
TIP: Part-year residents will rarely qualify for this credit. If you completed line 23 of the Utah return and the income earned in another state(s) was NOT included in "Column A Utah Income" on form TC-40A, Part 3 you cannot take this credit.

NON OR PART-YEAR RESIDENTS: If you are a nonresident or part-year resident, the sum of your nonrefundable credits cannot be greater than the amount on line 23 less line 31 (subtract line 31 from line 23). Write the code, name and amount of each nonrefundable credit you qualify for on lines 34a through 34e. A description of each nonrefundable credit follows the list below.
Codes for line 34a through 34e 01 - At-Home Parent 02 - Qualified Sheltered Workshop 03 - Renewable Energy Systems 04 - Clean Fuel Alternative 05 - Clean Fuel Vehicle 06 - Historic Preservation 07 - Enterprise Zone 08 - Low Income Housing 09 - Hiring Disabled 10 - Recycling Market 11 - Tutoring Disabled 12 - Research Activities 13 - Research Mach./Equip.

As a Utah resident you must report all of your income regardless of where it was earned. As a part-year resident, all income received during the period of Utah residency is taxable in Utah, regardless of the source of that income. Income from Utah sources is taxable in Utah during the period of non-residency.
A Utah resident or part-year resident whose income is taxed by Utah AND another state(s), the District of Columbia, or a possession of the United States, is entitled to a credit against Utah income tax for the amount of tax paid to the other state(s).

Add lines 34a through 34e. (01) At-Home Parent Tax Credit (UCA §59-10-108.1) An at-home parent may claim a nonrefundable credit of $100 for each child 12 months old or younger on the last day of the taxable year for which the credit is claimed. For purposes of this credit, "at-home parent" includes: · Biological mother or father, · Stepmother or stepfather, · Adoptive parents, · Foster parents, · Legal guardian, or · Individuals in whose home the child is placed by a childplacing agency for the purpose of legal adoption. To qualify for the credit the following criteria must be met: 1. The child must be 12 months or younger on the last day of the taxable year for which the credit is claimed. 2. The at-home parent must provide full-time care in the athome parent's residence. 3. The child must be claimed as a dependent by the at-home parent. 4. The sum of the at-home parent's total wages, tips, and compensation listed on federal W-2 forms and the gross income on federal Schedule C, "Profit or Loss From a Business," line 7, must be $3,000 or less for the taxable year.

Part-year residents will rarely qualify for this credit, as Utah and other states apportion income and only tax the income earned while a resident of that state. To qualify, the income must be: 1. Taxable in Utah, 2. Taxed by another state(s), and 3. Included in "Column A - Utah Income" on form TC-40A, Part 3. Calculate the Credit: To calculate the credit for taxes paid to another state, complete the Utah form TC-40A, PART 1, included in this booklet. If there are more than two states, use additional copies of TC-40A. Attachments Required: You MUST attach TC-40A and a signed copy of each state's income tax return for which credit is claimed.
www.incometax.utah.gov For complete income tax information.

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5. If the at-home parent files a joint return with another taxpayer, the federal adjusted gross income of both taxpayers must be $50,000 or less. 02) Qualified Sheltered Workshop Cash Contribution Credit (UCA §59-10-108) There is no form for this credit. Keep any documentation to support this credit. The name of the qualified workshop must be written on the return to claim credit. TIP: Charitable contributions claimed on the federal Schedule A cannot be claimed as a credit on the Utah return. Cash contributions made within the tax year to a qualified nonprofit rehabilitation sheltered workshop facility for persons with disabilities operating in Utah are eligible for a credit against Utah income taxes. Check with the workshop to make sure they have a current Day Training Provider License or Day Support Provider Certificate issued by the Department of Human Services. The credit is equal to 50 percent of the total of cash contributions, not to exceed $200. Contributions claimed as a tax credit under this section may not also be claimed as a charitable deduction in determining net taxable income. Contact Contract Administrator, Division of Services for People with Disabilities, 120 N 200 W #411, Salt Lake City, UT 84103; telephone (801) 538-4200 for more information. (03) Renewable Energy Systems Tax Credit (UCA §59-10-134) Attach form TC-40E, "Renewable Energy Systems Tax Credit" with the Utah Energy Office stamp, verifying the credit has been approved. To qualify for the Renewable Energy Systems Tax Credit, you must have installed or upgraded a renewable energy system, such as solar or wind generated power systems, during the tax period. Energy savings devices, such as insulation, siding, thermal windows, and high efficiency furnaces do not qualify. In order to determine if your system or system components and installation qualify for the tax credit, you must submit a written application, complete with signatures and photocopies of receipts, to the Utah Energy Office (UEO). Application forms can be obtained from the UEO, 1594 W. North Temple, Suite 3610, Box 146480, SLC, UT 84114-6480, telephone (801) 538-5428 or through the Internet at www.nr.utah.gov/ energy/credits.htm. If your system meets the eligibility requirements, UEO will send you a TC-40E form with information on your eligible system and installation costs and the UEO stamp of approval. (04) Clean Fuel Alternative Credit (UCA §59-10-128) Complete and attach form TC-40F, "Clean Fuel Alternative Tax Credit" with the Utah Energy Office seal, verifying the credit has been approved. To qualify you must have purchased and installed EPA certified pellet burning stoves, high mass wood stoves, solid fuel burning devices, and natural gas or propane free standing fireplaces or inserts. Contact the Division of Air Quality, Department of Environmental Quality, 150 North 1950 West, SLC, UT 84116-0385; telephone (801) 536-4000 to obtain form TC-40F, certification, and for additional information. (05) Clean Fuel Vehicle Credit (UCA §59-10-127) Complete and attach form TC-40V, "Clean Fuel Vehicle Tax Credit," with the Division of Air Quality approval stamp, verifying the credit has been approved. To qualify you must have: · Purchased a vehicle registered in Utah, for which this credit has not been taken, that was manufactured to use propane, natural gas, or electricity, or · Purchased and installed equipment to convert a vehicle registered in Utah to use propane, natural gas, or electricity. Note: Hybrid vehicles do not qualify for this credit. The credit is: · 50% of the incremental cost of a new vehicle, up to a maximum tax credit of $3,000, or · 50% of the cost of the equipment for conversion, up to a maximum tax credit of $2,500, or · 50% of the cost of the equipment for conversion of a special fuel mobile equipment engine, up to a maximum tax credit of $1,000. Contact the Division of Air Quality, Department of Environmental Quality, 150 North 1950 West, SLC, UT 84116-0385; telephone (801) 536-4000 to obtain form TC-40V, approval, and for additional information. (06) Historic Preservation Credit (UCA §59-10-108.5) Complete and attach form TC-40H, "Historic Preservation Tax Credit" with the State Historic Preservation Office certification, verifying the credit has been approved. This is a credit for costs incurred in connection with qualified rehabilitation of any residential certified historic building. Unused credits may be carried forward five years as a credit against Utah tax due. Contact the State Historic Preservation Office, 300 Rio Grande, SLC, UT 84101; telephone (801) 533-3563 to obtain form TC-40H, certification, and for additional information. (07) Enterprise Zone Credit (UCA §9-2-413) There is no form for this credit. Keep any documentation to support this credit. For businesses to qualify for the enterprise zone credit, at least 51 percent of the employees employed by the business located in the enterprise zone must reside in the county in which the enterprise zone is located. · Public utilities and businesses engaged in retail trade are not eligible for this credit. · Construction jobs are not eligible for the tax credits in paragraphs 1- 4 below. The following state tax credits are applicable to qualifying businesses in an enterprise zone: 1. A credit of $750 for each new full-time position filled for not less than six months during a tax year. 2. An additional $500 tax credit if the new position pays at least 125 percent of the county average monthly nonagricultural payroll wage for the respective industry as determined by the Department of Workforce Services. If this information is not available, the job must pay at least 125 percent of the total average monthly nonagricultural payroll wage in the respective county where the enterprise is located.

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3. An additional credit of $750 may be claimed if the new position is in a business that adds value to agricultural commodities through manufacturing or processing. 4. An additional $200 credit may be claimed for two consecutive years for each new employee who is insured under an employer-sponsored health insurance program, if the employer pays at least 50 percent of the premium cost for two consecutive years. 5. A 50 percent credit, not to exceed $100,000, for cash contributions made to a private nonprofit corporation that is exempt from federal income tax under Section 501(c)(3) of the IRS Code, whose primary purpose is community and economic development, and is accredited by the Utah Rural Development Council Board of Directors. 6. A 25 percent credit of the first $200,000 spent on rehabilitating a building, vacant for two years, in the enterprise zone. 7. An annual investment tax credit of 10 percent of the first $250,000 investment and 5 percent of the next $1,000,000 qualifying investment in plant, equipment, or other depreciable property. A business claiming a credit under paragraphs 1- 4 may claim a credit for 30 full-time employee positions or less in each of its taxable years. A business may claim an additional credit for a full-time employee position under paragraphs 1 - 4 above if: 1. The business creates a new full-time employee position; 2. The total number of full-time employee positions is greater than the number of full-time employee positions previously claimed by the business under paragraph 1 - 4; and 3. The total number of credits claimed for its current taxable year, including the new full-time employee positions being claimed as a credit, is less than or equal to 30. If the tax credit exceeds the tax owed, the credit amount exceeding the amount owed may be carried forward for a period that does not exceed the next three taxable years. Indian tribes may apply for enterprise zone designation within an Indian reservation. If enterprise zone credits are being taken on your ownership in a partnership or S corporation, you must allocate the credits calculated above based on your respective percentage of ownership. Contact the Department of Community and Economic Development, 324 S. State St., Suite 500, SLC, UT 84111, telephone (801) 538-8782 to obtain additional information. (08) Low Income Housing Credit (UCA §59-10-129) Individuals sharing in the credit must attach form TC-40TCAC, "Utah Low-Income Housing Tax Credit Allocation Certification," and complete and attach form TC-40LI, "Summary of Utah Low-Income Housing Tax Credit," to the return. If you are carrying this credit forward or backward, you must also attach form TC-40LIC, "Utah Low-Income Housing Tax Credit Carryback and/or Carryforward," to your return. The building project owner must also complete and attach form TC-40LIS, "Credit Share Summary of Low-Income Housing Project" to the return. This credit is an amount, determined by the Utah Housing Corporation, for the owners of a low-income housing project that have also received an allocation of the federal lowincome housing tax credit. Unused credits may be carried back three years or carried forward five years. When this credit is applicable, the project owner will provide form TC-40TCAC (issued by the Utah Housing Corporation) to the taxpayer. Contact the Utah Housing Corporation, 554 South 300 East, SLC, UT 84111, telephone (801) 521-6950. (09) Credit For Employers Who Hire Persons With Disabilities (UCA §59-10-109) Complete and attach form TC-40HD, "Tax Credit for Employers Who Hire Persons with Disabilities," showing certification. The credit is for employers hiring individuals with disabilities who: (1) worked in this state for at least 6 months in a taxable year for that employer, and (2) are paid at least minimum wage by that employer. Individuals with disabilities are defined as individuals who: (1) have been receiving services from a day-training program or from a supported employment program for persons with disabilities, which is certified by the Department of Human Services as a qualifying program for at least six consecutive months prior to working for the employer claiming the tax credit, or (2) are eligible for services from the Division of Services for People with Disabilities at the time the individuals begin working for the employer claiming the tax credit. Contact the Utah Department of Human Services, Division of Services for People with Disabilities, 120 N. 200 W., Room 411, SLC, Utah 84103, telephone (801) 538-4200 to obtain form TC-40HD, certification and for additional information. (10) Recycling Market Development Zones (UCA §59-10-108.7) Attach the completed form TC-40R, "Recycling Market Development Zone Tax Credit," with the Department of Community and Economic Development certification verifying the credit has been approved. The Utah legislature has authorized credit to individuals and businesses operating in a designated recycling market development zone as defined in UCA §9-2-1602. Contact Lester Prall at the Department of Community and Economic Development, 324 S. State Street, Suite 500, SLC, UT 84111, (801) 538-8804 (or email [email protected]) to obtain form TC-40R, certification, and for additional information. (11) Tutoring Credit For Disabled Dependents (UCA §59-10-130) There is no form for this credit. Make sure you keep any documentation to support this credit. The credit is equal to 25 percent, up to $100, of the costs paid by the taxpayer for tutoring each disabled dependent. A disabled dependent is defined as a person who: (1) is disabled under UCA §53A-15-301; (2) attends a public or private kindergarten, elementary, or secondary school; and (3) is eligible to receive disability program monies under UCA §53A-17a-111.

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Tutoring, for purposes of this credit means educational services approved by an individual education plan team and provided to a disabled dependent that supplements classroom instruction the disabled dependent receives at a public or private kindergarten, elementary, or secondary school in the state. Tutoring does not include: 1. Purchases of instructional books and materials; or 2. Payments for attendance at extracurricular activities, including sporting events, musical or dramatic events, speech activities, or driver education. Contact the Utah State Board of Education at (801) 538-7700 for additional information. (12) Tax Credit for Increasing Research Activities (UCA §59-10-131) The credit is for expenses incurred for increasing qualified research activities in Utah. A qualifying taxpayer may claim the credit in the taxable year immediately following the taxable year for which the taxpayer qualifies for the credit. A qualifying taxpayer may take the following nonrefundable credits for research activities in Utah: 1) A research credit of 6 percent of the taxpayer's qualified research expenses for the current taxable year that exceed the base amount; and 2) A credit for payments to qualified organizations for basic research, as provided in IRC Section 41(e), of 6 percent for the current taxable year that exceed the base amount. For detailed information regarding this credit, including definition of terms and procedures for claiming the credit, refer to UCA §59-10-131. (13) Tax Credit for Machinery and Equipment Used to Conduct Research (UCA §59-10-132) The credit is for machinery, equipment, or both used primarily for conducting qualified research or basic research in Utah for a time period of not less than 12 consecutive months. A qualifying taxpayer may claim the credit in the taxable year immediately following the taxable year for which the taxpayer qualifies for the credit. A qualifying taxpayer may take the following nonrefundable credits: 1. A credit of 6 percent of the purchase price of certain machinery and equipment primarily used to conduct qualified research in Utah; and 2. A credit of 6 percent of the purchase price of certain machinery and equipment donated to a qualified organization and used primarily to conduct basic research in Utah. For detailed information regarding this credit, including definition of terms and procedures for claiming the credit, refer to UCA §59-10-132. 35b. Agricultural Off-Highway Gas/Undyed Diesel Tax Credit Attach federal form 1040 Schedule F or K-1. There is no state form for this credit. Keep all personal records, forms, and worksheets to support this credit. The credit is 24.5 cents per gallon only for motor fuel and undyed diesel fuel purchased in Utah to operate stationary farm machinery used solely for commercial nonhighway agricultural use that was taxed at the time of purchase. Activities that DO NOT qualify for this credit include, but are not limited to, the following: golf courses, horse racing, boat operations, highway seeding, vehicles registered for highway use, hobbies, farming for personal use, etc. Multiply your total gallons eligible for the credit by 0.245. Write the gallons and credit amount on line 35b of your state return. 35c. Non Or Part-Year Residents - Nonresident Shareholders' Withholding Tax Credit There is no form for this credit. Keep all personal records, forms, and worksheets to support this credit. Attach a copy of the schedule K-1 issued by the corporation indicating your share of amounts withheld or a statement from the corporation indicating that information. If you are a nonresident shareholder of an S corporation, you are entitled to a credit for the Utah income tax withheld and paid by the S corporation on your behalf. You are entitled to claim a credit equal to your respective share based on ownership as it relates to other nonresident shareholders and the amount withheld by the S corporation on behalf of the nonresident shareholders. To claim the credit, the federal identification number of the S corporation must be entered on line 35c of your state return. 35d. Special Needs Adoptions Credit (UCA §59-10-133) A taxpayer who adopts a child with special needs may claim a refundable credit of $1,000 for each child adopted. This credit may only be claimed in the tax year the court issues the order granting the adoption and may not be carried forward or back. To claim this credit, permanent custody of the child must have been awarded to the Utah Division of Child and Family Services, and the child must meet one of the following conditions: · Be five years of age or older · Be under the age of 18 with physical, emotional, or mental disability; or · Be a member of a sibling group (two or more persons) placed together for adoption Write the total of lines 35a through 35d on line 35.

35.

REFUNDABLE CREDITS

35a. Mineral Production Withholding Tax Credit Enter on line 35a the total of the mineral production tax withheld as shown on forms TC-675R or federal schedule K-1(s) for 2001. Attach copies of form TC-675R or K-1 to the return to receive proper credit. (Include with other W-2 and 1099 forms.)

36.

TOTAL WITHHOLDING AND CREDITS

15 37. TAX DUE 38. REFUND
If the AMOUNT on line 36 is greater than the AMOUNT on line 29, enter the amount of refund on this line. NOTE: Your refund may be applied to any outstanding federal or state debt owed. If the AMOUNT shown on line 29 is greater than the AMOUNT on line 36, enter the balance of tax due on this line. PAYMENT INSTRUCTIONS · Make check or money order payable to the Utah State Tax Commission, · Write your social security number, daytime telephone number and "2001 TC-40" on your check, · Enclose payment with your return - DO NOT STAPLE check to return, OR · Mail or deliver payment to the State Tax Commission. DO NOT send another copy of your tax return with your payment. Doing so may delay posting of your payment. DO NOT MAIL CASH. The Tax Commission assumes no liability for loss of cash placed in mail. ALLOW AT LEAST 90 DAYS FOR YOUR RETURN TO BE PROCESSED. PENALTY AND INTEREST, if applicable, will be billed. Penalty and interest charges are explained in the "Penalties and Interest" instructions on page 3. PAYMENT AGREEMENT: If you owe tax and did not send your payment with your return, a billing notice will be mailed to you. Upon receiving this notice, you may call (801) 297-7703 or 1-800-662-4335 ext. 7703 to request a formal payment agreement. Do not send a request for a payment agreement with your return; however, payment may be submitted, prior to the billing notice, per the instructions above.

39.

REFUND APPLIED TO 2002 TAXES

You may apply all or part of your refund shown on line 38 as a prepayment for your 2002 Utah income tax liability. Enter the amount of refund you want applied as a credit to your 2002 tax on line 39. YOUR REFUND WILL BE REDUCED BY THIS AMOUNT. Any part of the refund that is not applied to your 2002 tax liability will be refunded to you. Once made, this election cannot be changed. If this is an amended return, you cannot apply your refund to next year's tax liability.

40.

DIRECT DEPOSIT
Tip: If you choose to deposit your refund directly into your account, you will not receive a check in the mail.

If you want your refund deposited directly into your checking or savings account, enter your financial institution's routing number and your account number. The check example shown below indicates where the routing and checking account numbers are located on your checks. If needed, contact your financial institution and they can provide this information to you. If for any reason your financial institution rejects your request for direct deposit, you will receive a check by mail instead of direct deposit. You cannot use Direct Deposit if you are AMENDING a return.

Direct Deposit Example

X

16
SIGNATURE You must sign the return. If the return is a joint return, both husband and wife must sign.

Signature For Deceased If your spouse died during 2001 or 2002, prior to filing, and you are filing a joint return, write "DECEASED" in the signature block for your spouse. See additional "deceased" instructions on pages 3 and 5. Attach form TC-131. Paid Preparers: The paid preparer must enter his or her name, address, and social security or federal identification number in the section below your signature on the return.
ENVELOPE Tip: If you have a refund, be sure to totally darken the BLUE box area on the front of the envelope using BLACK ink so that none of the vertical lines are showing.

An envelope has been provided in this booklet for you to mail your return and to help you get your refund more quickly. ATTACH WITHHOLDING FORMS To receive credit for Utah taxes withheld, you must attach your W-2, 1099R, 1099MISC, TC-675R, or other forms that show the amount of Utah taxes withheld for 2001. Do NOT staple any check or money order to the return with these forms. IRS All information on your return is compared to information filed with the IRS.

17

2001 TAX CALCULATION WORKSHEET
1. Determine if you will use WORKSHEET A or WORKSHEET B by your filing status on line 1 of your return. For example, if you checked box 1b for Head of Household, you would use WORKSHEET B. 2. On the WORKSHEET, locate the taxable income column that matches the taxable income on line 21 of your state income tax return. For example, if you used WORKSHEET B and your income on line 21 was $5,500, you would look for the taxable income column that is "$5,177 to $6,900." 3. Under the selected taxable income column, complete the calculations as instructed on the WORKSHEET.

WORKSHEET A For Single or Married Filing Separate
Use this worksheet if you checked box 1a or 1d on the front of the return.
If taxable income from line 21 is a. Taxable income from line 21 b. Amount to subtract

ä
­
x = + =

$0 to $863

$864 to $1,726 $1,727 to $2,588 $2,589 to $3,450 $3,451 to $4,313

Over $4,313

0

­
= x =

$863

­ $1,726
= x = .042

­ $2,588
= x = .052

­ $3,450
= x = .06

­
= x =

$4,313

c. Subtotal (subtract b from a) = d. Tax rate e. Subtotal (multiply c by d) f. Amount to add g. This is your Utah income tax. (Add lines e and f) Enter on line 22 .023

.033

.07

0

+ =

$20

+ =

$48

+ =

$85

+ =

$129

+ =

$181

WORKSHEET B For Married Filing Joint, Head of Household, or Qualifying Widow(er)
Use this worksheet if you checked box 1b, 1c, or 1e on the front of the return.
If taxable income from line 21 is a. Taxable income from line 21 b. Amount to subtract

ä
­
x = + =

$0 to $1,726

$1,727 to $3,450 $3,451 to $5,176 $5,177 to $6,900 $6,901 to $8,626

Over $8,626

0

­
= x =

$1,726

­ $3,450
= x = .042

­ $5,176
= x = .052

­ $6,900
= x = .06

­
= x =

$8,626

c. Subtotal (subtract b from a) = d. Tax rate e. Subtotal (multiply c by d) f. Amount to add g. This is your Utah income tax. (Add lines e and f) Enter on line 22 .023

.033

.07

0

+ =

$40

+ =

$97

+ =

$169

+ =

$259

+ =

$362