23 Jul How the New Child Tax Credit Will Impact Your Utah Tax Return
The new tax bill passed for 2018 and future tax years made a lot of changes that impacted virtually every taxpayer in the country. One of the most widely impactful changes comes from the government’s elimination of personal exemptions. Personal exemptions are the deductions that you used to receive on your tax return for every dependent you could claim on your return, including yourself.
These exemptions have been eliminated, which means most Utah families will see a significant increase in the amount of tax they owe—especially for middle-class families with more than two children. On Wednesday, local lawmakers passed a major tax cut to help offset this increase for Utah families. Here’s what we know about this new Utah tax law so far.
What’s Included in the Tax Bill?
Few details on the new Utah tax bill have been made available yet, but the tax cut for families will come in the form of a new child tax credit. Essentially, rather than earning an exemption for your dependents, you will receive an additional credit on your tax return.
Utah lawmakers voted overwhelmingly to implement this $30 million tax cut to help alleviate the strain that the recent tax reform will put on larger families—and with the largest average household size in the nation, Utah is sure to see a higher impact on families’ tax returns than most other states. While the tax cut won’t completely offset the impacts of the federal tax reform bill, lawmakers believe it will eliminate roughly 45% of the tax increase for most families.
Claiming the Child Tax Credit
We don’t yet have details on the limitations for the new child tax credit, or how to claim it on your 2018 tax return. However, we will stay up to date on this new bill and ensure that all of our clients stay informed of how these changes will impact you. Ultimately, this should be a positive thing for Utah families, and should help reduce the amount of tax you owe next year.
If you have further questions about this new Utah tax law, feel free to contact one of our CPAs here at The Accounting Guys.