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. Utah likely conforms to the OBBBA tips and overtime deductions via rolling IRC conformity.
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 - Utah Likely Conforms via Rolling IRC
Utah uses rolling IRC conformity, meaning federal tax law changes automatically flow through to Utah unless the legislature enacts specific decoupling. No Utah decoupling legislation for the OBBBA tips, overtime, or senior bonus deductions has been identified. Workers who claim these deductions federally likely benefit on their Utah return as well - but verify from the 2026 Utah TC-40 instructions or Tax Commission guidance when published.
Utah Grocery Tax
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.
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?
Utah likely conforms to the OBBBA tips and overtime deductions via rolling IRC conformity. Utah generally adopts federal IRC changes automatically without requiring specific state legislation. No Utah Tax Commission decoupling legislation or bulletin excluding the OBBBA deductions has been identified. However, no official Utah Tax Commission bulletin specifically confirming OBBBA conformity has been published as of mid-2026 - verify when the 2026 TC-40 instructions are released.
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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