Payroll

New legislation, recently signed by Utah Governor Spencer Cox, reduces the individual income tax rate and modifies the earned income tax credit. Effective for the taxable year beginning on or after January 1, 2023, the individual income tax rate is reduced to 4.65% from 4.85%. Also, the definition of "personal exemption" is amended to mean $1,750 multiplied by the number of the claimant's qualifying dependents, plus an additional qualifying dependent in the year of a qualifying dependent's birth. The calculation of the nonrefundable earned income tax credit is modified to be the lesser of 20% (previously, 15%) of the amount of the federal earned income tax credit that a qualifying claimant was entitled to claim on a federal income tax return for the current taxable year; and the total Utah wages reported on the qualifying claimant's W-2 form for the current taxable year [L. 2023, H54].