Utah's flat 4.45% income tax took effect January 1, 2026 under SB 60 - the sixth consecutive annual rate cut. Instead of a standard deduction, Utah uses a taxpayer tax credit (6% of federal standard deduction plus per-dependent allowance, phasing out at higher incomes). Groceries are taxed at the reduced 1.75% state rate. The federal tips and overtime deductions do not reduce Utah income.
State Income Tax
Flat 4.45%
State Sales Tax
4.70% + local
State Grocery Rate
1.75% (reduced)
Supplemental Rate
4.45%
Capital Gains
Flat 4.45%
Utah Income Tax 2026
Utah's flat 4.45% applies to all Utah taxable income. Utah does not use a standard deduction. Instead, a taxpayer tax credit reduces your tax bill directly - it equals 6% of your applicable federal standard deduction plus $2,111 per dependent. The credit phases out at 1.3% of Utah AGI above the filing-status thresholds (verify 2026 phase-out amounts from Utah Tax Commission when published). High-income taxpayers may receive little or no credit.
OBBBA Conformity - No Utah Benefit
Utah's TC-40 starts on line 4 with federal adjusted gross income. The federal tips, overtime, and senior deductions are figured on Schedule 1-A after AGI, and Utah has no subtraction for them. The Utah State Tax Commission's January 15, 2026 tax update webinar: "These additional deductions will have no effect on the Utah return as they are a 'below the line' deduction. If it does not change the FAGI or the standard or itemized deduction, it will not affect the Utah tax return."
One narrow exception: Utah's qualified exempt taxpayer worksheet (TC-40 line 21) uses the federal senior deduction. Source: Utah State Tax Commission webinar slides.
Utah taxes unprepared food and food ingredients at a reduced state rate of 1.75% rather than the general 4.70% state rate. Local option sales taxes apply to groceries at their full local rates, bringing the typical combined grocery rate to approximately 3.0% depending on location. Prepared food sold at grocery stores (meals, hot items) is taxed at the full general rate.
Utah Sales Tax
Utah's general state sales tax rate is 4.70%. Local jurisdictions add their own rates - combined statewide rates typically range from about 6.35% in rural unincorporated areas to 8.75% in resort communities like Park City. Unprepared groceries are taxed at the reduced 1.75% state rate.
Yes. Utah imposes a flat state income tax rate of 4.45% on taxable income for TY2026.
What is Utah's income tax rate for 2026?
Utah has a flat 4.45% state income tax for 2026. SB 60 (signed March 23, 2026, retroactive to January 1, 2026) reduced Utah's rate from 4.50% to 4.45% - the sixth consecutive annual rate cut. Instead of a standard deduction, Utah uses a taxpayer tax credit system equal to 6% of the sum of the federal standard deduction plus $2,111 per dependent, phased out at 1.3% of AGI above filing-status thresholds.
How does Utah's taxpayer tax credit work instead of a standard deduction?
Utah does not use a traditional standard deduction. Instead, it provides a taxpayer tax credit computed as 6% of (dependents à - $2,111 + your applicable federal standard deduction). This credit directly reduces your Utah tax liability dollar-for-dollar. The credit phases out at 1.3% of Utah AGI above certain thresholds (approximately $18,213 for single, $36,426 for MFJ - verify 2026 amounts from Utah Tax Commission). High-income taxpayers may receive no credit benefit.
What is Utah's grocery tax rate?
Utah taxes groceries at a reduced state rate of 1.75% - not the general 4.70% state rate. Local sales taxes still apply to food at their full rates, bringing the typical combined grocery rate to approximately 3.0%. Unprepared food and food ingredients are taxed at the 1.75% state food rate. Prepared food sold at grocery stores (restaurant-style) is taxed at the full general rate.
Does Utah conform to the OBBBA tips and overtime deductions?
No Utah benefit. The Utah State Tax Commission has said these deductions "will have no effect on the Utah return as they are a 'below the line' deduction." Utah starts from federal adjusted gross income (TC-40 line 4) and has no subtraction for tips or overtime, so both remain taxable in Utah.
What is Utah's sales tax rate?
Utah's general state sales tax rate is 4.70%. Local jurisdictions add their own rates - combined statewide rates typically range from approximately 6.35% in rural unincorporated areas to 8.75% in resort communities. Groceries are taxed at the reduced state food rate of 1.75% (state portion only; local taxes on food apply at full local rates).
How has Utah's income tax rate changed in recent years?
Utah has been cutting its flat income tax rate annually: 4.95% (2023), 4.85% (2024), 4.55% (2025), and now 4.45% for 2026 under SB 60. Each cut was enacted by the Utah Legislature as part of a sustained tax reduction effort. The rate has dropped by half a percentage point over three years.
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