A Mix of Tax Cuts for Utahns in 2021

Back during the 2019 session, Utah’s Legislature set aside at least $75 million for a future tax cut. Since that time, there has been a failed tax reform proposal, disagreement on what the tax cut would look like in early 2020, and then COVID-19 hit.

With this history in mind, going into the 2021 session, legislative leaders were committed to a tax cut of at least $80 million, but that number ended up being closer to $100 million. Though there were proposals for a broad income tax rate cut, the Legislature settled on three targeted income tax cut proposals. They are as follows:

  • House Bill 86, sponsored by Rep. Walt Brooks, which provides an $18 million state income tax cut for seniors whose adjusted gross income is made up mainly of social security benefits. They will no longer be taxed a second time on these benefits.
  • Senate Bill 11, sponsored by Sen. Wayne Harper, eliminates state income taxes on military retirement benefits entirely, to the tune of $24 million.
  • Senate Bill 153, sponsored by Sen. Lincoln Fillmore, restores a large part of the dependent exemption that was ended by default in the 2017 federal income tax cut. Utah partially restored it in 2018, and this bill adds another $55 million in cuts.

These tax changes will apply starting in the 2021 tax year.

About the author

Michael Melendez

Michael is the Executive Vice President, overseeing Libertas’ policy operations, including policy analysis, government affairs, and organizational strategy. Prior to joining Libertas he was a legislative aide for a Utah state senator and the state government affairs manager for Waterford Institute, a digital education non-profit. Michael has also managed and worked on dozens of campaigns around the country, which included directing the Trafalgar Group’s nationally recognized polling operations in 2016.

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