Utah Residency Requirements for Tax Purposes

An individual’s connection to Utah determines how their income is taxed. The state uses a residency system to establish its authority to tax a person’s income. This classification dictates which portion of an individual’s income is subject to Utah tax and the specific forms they must file.

Defining Utah Tax Residency

Utah defines a full-year resident as someone domiciled in the state for the entire year. Domicile is the location of your true, fixed, and permanent home, and it is the place you intend to return to after any absence. Since intent can be subjective, Utah examines several factors to determine domicile, including:

• The location of a permanent home
• Where an individual is registered to vote
• The state that issued their driver’s license
• Where their vehicles are registered
• Where dependents attend K-12 public school
• Enrollment as a resident student at a Utah university
• The location of primary bank accounts and professional licenses

No single factor is definitive, as the state weighs the collective evidence to make a determination. An individual can only have one domicile at a time, even if they own property in multiple states.

Beyond domicile, Utah has a statutory residency test known as the 183-day rule. An individual is considered a Utah resident if they maintain a “permanent place of abode” in the state and are physically present in Utah for 183 or more days during the tax year. A “day” is counted as any part of a day spent within state borders, and this rule can make someone a resident even if their domicile is elsewhere.

A part-year resident is someone who moves into or out of Utah during the tax year. A non-resident is an individual who was not domiciled in Utah at any point during the year and did not meet the 183-day rule.

Tax Obligations for Each Residency Status

Tax responsibilities in Utah are tied to residency status. Full-year residents are taxed on all income earned, regardless of its source. To prevent double taxation, Utah allows residents to claim a credit for income taxes paid to another state on the same income.

Part-year residents are taxed on all income from every source earned during the portion of the year they were a Utah resident. They must also pay Utah tax on any income from Utah sources during the period they were a non-resident.

Non-residents are required to pay Utah tax only on income derived from Utah sources. This includes wages for services performed in Utah, rental income from real estate in Utah, and any business income generated from operations within the state.

Residency Rules for Specific Groups

Certain groups are subject to specific applications of the residency rules. For active-duty military personnel, federal law provides special considerations. A servicemember stationed in Utah does not automatically become a Utah resident for tax purposes if their legal “home of record” is another state, and their military pay is not subject to Utah income tax.

Spouses of military members may also receive special treatment under the Military Spouses Residency Relief Act (MSRRA). This federal act allows a non-military spouse to maintain their original state of domicile for tax purposes while living in Utah with their servicemember spouse, provided they meet certain criteria.

Students attending a college in Utah do not establish Utah domicile if they are in the state solely for educational purposes and maintain their domicile elsewhere. Their status depends on factors like where they are registered to vote and whether they intend to return to their home state. A student who takes steps to establish a permanent home in Utah could be reclassified as a resident.

Individuals in Utah for a temporary work assignment must pay attention to the 183-day rule. Even if they maintain a domicile in another state, spending 183 or more days in Utah while maintaining a place of abode can trigger statutory residency.

Required Tax Forms by Residency Status

Full-year residents file their annual return using Form TC-40, the Utah Individual Income Tax Return. Part-year residents and non-residents also file Form TC-40 but must attach Form TC-40B, the Utah Non-resident and Part-Year Resident Schedule. This schedule is used to correctly apportion the filer’s income, separating income earned as a resident from income earned as a non-resident and identifying all Utah-source income.

Residents who have paid income tax to another state use Form TC-40S, Credit for Income Tax Paid to Another State. This form is used by full-year and part-year residents to claim a credit against their Utah tax liability, preventing the same income from being taxed by both states.