HB 179 revises Utah’s nonrefundable individual income tax credit for Social Security benefits. The bill removes the income-based phaseout that previously limited eligibility, so taxpayers who receive Social Security benefits may claim the credit regardless of modified adjusted gross income. It also makes technical changes to the statute, including simplifying the credit calculation language and updating references to state taxable income.
Under the bill, the credit remains nonrefundable and cannot be carried forward or back if it exceeds tax liability. It also cannot be claimed in the same year as the separate retirement-income credit under Section 59-10-1019. The bill takes effect May 7, 2025, and applies retroactively to tax years beginning on or after January 1, 2025.
Impact
The bill amends Utah Code Section 59-10-1042 and expands access to the Social Security benefits tax credit by eliminating income thresholds that previously restricted eligibility. As a result, more taxpayers receiving Social Security benefits may reduce their Utah income tax liability, though only up to the amount of tax owed because the credit remains nonrefundable. The bill does not appropriate money and does not change the separate prohibition on claiming both this credit and the retirement-income credit for the same tax year.
Sentiment
Based on the bill text and the absence of recorded committee debate or votes in the provided materials, the overall sentiment appears supportive and straightforward. The measure is framed as a tax modification for Social Security recipients, with no visible opposition or recorded controversy in the supplied context. The retrospective effective date suggests an intent to provide the benefit for the 2025 tax year as soon as possible.
Contention
The main policy issue is whether the Social Security tax credit should be available to all recipients or only to those below certain income levels. By removing the phaseout, the bill broadens eligibility and may be viewed as a tax cut for middle- and higher-income retirees, while also increasing the fiscal cost to the state. Another possible point of contention is the interaction with the existing retirement-income credit, since taxpayers must choose between the two credits for the same year.