Lawmakers considering $341 million income tax reduction, but not until 2022

Legislative leaders say they're eyeing a $341 million income tax cut, but the entire reduction will be phased in over time to correspond with a proposed overhaul of the sales tax.

Legislative sources tell UtahPolicy.com that, when the proposed income tax cut is fully implemented in FY2022, it will cover four key areas and include approximately $80 million of targeted cuts geared toward lower-income Utahns.

• Dropping the income tax rate from the current 4.95% to 4.75% - a $266 million total reduction.
• An increase in the earned income tax credit (EITC) of $7 million.
• A $15 million expansion of the Social Security tax credit
• $53 million to cover the changes in federal tax calculations resulting from the elimination of tax exemptions for Utahns with an income somewhere in the neighborhood of $85,000 and less.

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