Utah Nonresident Spouse Tax Guidelines
When one spouse is a Utah resident and the other is a nonresident, specific rules apply for Utah state income tax purposes. The nonresident spouse may be exempt from Utah income tax under certain conditions, particularly if they are the spouse of a military service member serving under military orders.
Exemption for Nonresident Military Spouses
- The income of a service member’s spouse is exempt from Utah income tax if:
- The spouse is not a resident of Utah.
- The spouse is not also a service member.
- The spouse is in Utah solely to be with the service member serving under military orders.
To claim this exemption, the nonresident spouse must file Utah Form TC-40A, Part 2, using subtraction code 88 (Nonresident Military Spouse Income). The total income should be reported on line 8 of the TC-40 return. Additionally, the nonresident spouse should file a federal W-4 form with their employer marked “Utah Only - Exempt military spouse” to stop Utah withholding on their income.
Filing Requirements for Mixed-Residency Couples
- If one spouse is a full-year Utah resident and the other is a full-year nonresident, they may file separate Utah income tax returns even if they file a joint federal return.
- The nonresident spouse is not required to file a Utah return unless they have Utah income.
- Special Instructions in the TC-40 instructions must be followed. These instructions require filing by paper or electronically using approved tax software (TAP cannot be used for Special Instructions).
- Part-year residents cannot use Special Instructions; filing status must match federal return.
Reporting Nonresident Spouse Income
- Enter “N” on the “Full-year Resident?” line next to the spouse’s name on the TC-40 return.
- Include the spouse’s federal adjusted gross income on line 4 of the TC-40, regardless of where it was earned.
- Report all of the nonresident spouse’s income on TC-40A, Part 2, using subtraction code 88.
- Attach TC-40B and complete it according to instructions, deducting only the Utah income of the nonresident spouse in Column A, line 33.
Determining Utah Domicile for Spouses
- If your spouse has Utah domicile under Test 1 (e.g., owns property, votes in Utah, has a Utah driver’s license), you also have Utah domicile.
- If your spouse has Utah domicile under Test 2 (e.g., lists Utah address on mail, tax return, or government document), you also have Utah domicile unless you can prove by preponderance of evidence that you did not:
- Own property in Utah.
- Spend more than 30 total days in Utah during the year.
Source:
Publication 57 - Military Personnel Instructions
TC-40 Forms and Instructions
Disclaimer: Always verify details with official Federal or State Department of Revenue Forms and Instructions.