Credits and breaks for Utah families: the dependent exemption, the under-6 child credit, the EITC and my529

Utah helps families with children in four places on the TC-40, and all four share one trait: they are nonrefundable. They reduce Utah tax to zero and stop. The first is the dependent exemption, $2,111 per qualifying child for 2025 (the 2026 indexed figure is to come), which enters the taxpayer tax credit at 6%, or about $127 per child before phase-out. The second is the Utah child tax credit, $1,000 for each child under age 6 at year end, reduced by 10 cents for every dollar of modified AGI above $61,000 joint, $49,000 single or head of household, or $30,500 married filing separately, lines the 2026 Legislature raised by $7,000, $6,000 and $3,500. The third is the Utah earned income tax credit, 20% of the federal EITC, capped at the family’s Utah W-2 wages. The fourth is the my529 credit, 4.45% of contributions to Utah’s own 529 plan up to a per-beneficiary limit. There is no Utah credit for child care, no K-12 tuition credit, and no state adoption credit. Because the taxpayer tax credit alone takes a low-income family’s tax close to zero, the family that looks like the target of the child credit and the EITC often cannot use them. The family that can use them is one with enough income to owe tax but not so much that the phase-outs have taken the credits away, roughly $40,000 to $70,000 of joint income.

The dependent exemption inside the taxpayer tax credit

Utah has no standard deduction and no exemptions as such. Instead, lines 11 through 20 of the TC-40 compute a taxpayer tax credit equal to 6% of the federal standard deduction (or 6% of itemized deductions minus state income tax), plus 6% of the “Utah personal exemption,” which is a fixed amount for each qualifying dependent. A qualifying dependent is a child or other dependent for whom you were allowed the federal child tax credit or credit for other dependents under IRC section 24, so the Utah count follows the dependents section of the 1040. In the year a child is born you count that child twice, which adds one more exemption to the birth-year return. The 2025 exemption was $2,111; 2026 is indexed and to come in December.

The credit then phases out at 1.3 cents per dollar of Utah taxable income above $36,426 joint, $27,320 head of household, or $18,213 single (2025 figures; 2026 to come). For a married couple with two children and the $32,200 standard deduction, the credit starts at $2,185 and is gone at about $204,500 of income. Each child adds roughly $127 of credit at the start and about $9,700 to the income at which the credit runs out. A head of household with one child and the $24,150 standard deduction starts with a $1,576 credit that runs out near $148,500. The full mechanics are in How Utah income tax works.

The Utah child tax credit: under 6, then gone

Utah Code 59-10-1047 gives a nonrefundable credit of $1,000 for each qualifying child who is under six years old on the last day of the year and for whom you are allowed the federal child tax credit. It is claimed on TC-40A Part 3 with code AT. The credit is reduced by 10 cents for each dollar of modified AGI, which is Utah total income minus any Utah municipal bond interest plus federally tax-exempt interest, above the threshold for your filing status. H.B. 290 of the 2026 General Session raised the thresholds, retroactive to January 1, 2026, to $30,500 married filing separately, $49,000 single or head of household, and $61,000 married filing jointly. The 2025 lines were $27,000, $43,000 and $54,000. The thresholds are not indexed.

Modified AGI, not Utah taxable income. The reduction is 10% of the excess applied to the total credit, so two children double the amount but not the window: at $75,000 joint a family with two children under 6 has $2,000 less $1,400, or $600 left.

Two things catch people. The age test is strict: a child who turns 6 on December 30 does not qualify for that year. And the credit is nonrefundable, so it is worth $1,000 only to a family whose Utah tax after the taxpayer tax credit is at least $1,000. A couple earning $48,000 with two small children owes about $100 of Utah tax before this credit, and so gets about $100 from it, not $2,000. For a two-child couple taking the standard deduction, Utah tax before this credit does not reach $1,000 until about $63,600 of income, by which point the credit for one child has already shrunk to about $740. The most the credit can be worth to such a family is roughly $850, at about $61,000 of income.

The Utah earned income tax credit

Utah Code 59-10-1044 gives a nonrefundable credit equal to 20% of the federal earned income credit you claimed for the same year, limited to the Utah wages shown in box 16 of your W-2s. It is code AM on TC-40A Part 3. Three consequences follow. First, a family whose earnings are from self-employment, with no W-2, gets nothing, because the cap is Utah wages and theirs are zero. Second, a family that already owes no Utah tax after the taxpayer tax credit gets nothing, because the credit cannot create a refund. Third, a family with enough wages and enough tax uses it fully: 20% of a $4,000 federal credit is $800 off the Utah bill. The federal credit itself is refundable and does not depend on Utah; see The earned income credit.

my529

Utah’s 529 plan is my529, and the state rewards contributions with a credit rather than a deduction: 4.45% of the amount you put in during the year, up to $2,560 per beneficiary on a single, head-of-household or separate return and $5,120 per beneficiary on a joint return for 2026 (verify), a maximum credit of $113.92 or $227.84 per beneficiary. The 2025 limits were $2,490 and $4,980 at 4.5%. You must be the account owner, the beneficiary must have been under 19 when added to the account, and contributions to another state’s 529 plan do not qualify. my529 reports your creditable contributions on Form TC-675H, box 1A or 1B, and the credit goes on TC-40A Part 3 with code 20. If money that earned the credit is later withdrawn for something other than qualified education, the withdrawal is added back to Utah income with code 54. Grandparents who own an account for a Utah grandchild claim the credit on their own Utah return, if they file one.

The credit is small, $228 on a $5,120 joint contribution, but it is the one family credit with no income phase-out of its own. A family too well off for the child credit and the EITC still gets it, and because it is per beneficiary, three children mean three credits.

The at-home parent credit

A nonrefundable $100 per child who is 12 months old or younger on December 31, claimed by an at-home parent who provides full-time care in the home, if that parent’s own W-2 wages plus Schedule C gross receipts were $3,000 or less for the year and the household’s federal AGI is $50,000 or less. It is code 01 on TC-40A. There is no form; keep the records. Combined with the extra birth-year exemption and the under-6 child credit, a baby born in 2026 to a qualifying household can be worth $100 plus $1,000 plus about $254 of taxpayer tax credit, before the nonrefundability limit.

What Utah does not have

No child and dependent care credit for families; the 2026 child care credits Utah expanded are for employers that build or pay for care. No credit or deduction for K-12 tuition or school expenses. No education credit of its own for college tuition; the federal American Opportunity and Lifetime Learning credits are credits, not deductions, so they do not change AGI and have no Utah counterpart. Student loan interest, by contrast, is an above-the-line federal deduction, so it reduces Utah income at 4.45%. No state adoption credit. A renter’s refund exists for low-income renters age 66 or older through the property-tax Circuit Breaker, not for families.

Filing status quirks

Utah uses the federal filing status, and the only place head of household gets its own treatment is the taxpayer tax credit phase-out, which starts at $27,320 for head of household versus $18,213 for single (2025 figures). The child tax credit and the EITC lines are the same for single and head of household. A married couple filing separately should know that the Utah child credit threshold for separate filers, $30,500, is less than half the joint line, and the taxpayer tax credit threshold for separate filers is the single figure, so splitting the return rarely saves Utah tax. Divorced parents follow the federal rule: the parent allowed the federal child tax credit for a child is the one who counts the child as a Utah qualifying dependent and, if the child is under 6, claims code AT.