Key Takeaways
Maximize your savings in 2025 through Utah rebates, Utah tax credits, and federal incentives that help you lower your tax bill, support your family, and fund energy-efficient upgrades.
- Claim Utah tax credits for dependents, children, and adoption expenses
- Use refundable federal credits like the EITC and Premium Tax Credit
- Reduce energy bills with state rebates and renewable energy incentives
- Lower business taxes through R&D and workforce-related tax credits
As a high-income earner, you must minimize taxes to preserve wealth and maximize financial efficiency. Utah offers a wide range of rebates and tax credits that reward smart planning, from energy-related incentives to family-focused benefits.
When paired with federal credits—such as child, adoption, education, or renewable energy incentives—these programs can meaningfully reduce tax liability and improve long-term financial outcomes. Many Utah families also explore programs like Utah Water Savers to reduce household expenses and promote sustainability.
This guide breaks down the major Utah and federal tax credits available in 2024–2025, with clear eligibility rules, credit amounts, and strategic considerations to help you avoid leaving money on the table.
Utah State Tax Credits and Rebates for 2025
Understanding Utah’s state-level tax incentives helps you protect more of your income while supporting family, business, and community priorities.
Utah Earned Income Tax Credit (EITC)
The Utah Earned Income Tax Credit (EITC) is a valuable, non-refundable credit equal to 20% of your federal EITC. To qualify for the state credit, you must satisfy two requirements: you must first be eligible for and claim the federal credit, and you must report all corresponding Utah wages via Form W-2.
Because this credit is specifically designed to benefit low- and moderate-income working individuals and families, high earners will generally not meet the income thresholds required to qualify.
Utah Child Tax Credit (CTC)
The Utah Child Tax Credit (CTC) is a non-refundable credit designed to provide targeted relief for families with young children.
For the 2024 tax year (filed in 2025), eligible families may claim a non-refundable credit of up to $1,000 per child, covering dependents ages 1 to 3 on the last day of the tax year.
The credit is phased out (reduced) for families whose Modified Adjusted Gross Income (MAGI) exceeds the following limits:
- $54,000 (Married Filing Jointly)
- $43,000 (Single or Head-of-Household)
The Utah Legislature has expanded eligibility for this credit, effective for the 2025 tax year (filed in 2026). The credit will now be available for children age five or younger (expanding the eligible age range). The $1,000 credit amount and income phase-out limits remain unchanged, but this update broadens the number of families who can benefit.
Special needs adoption credit
The Utah Adoption Tax Credit for children with special needs provides a benefit for adoptive families.
It’s a valuable, refundable $1,000 tax credit available for families adopting a child who meets the specific definition of having a special need. The refundable status is particularly beneficial, as it means the credit can be claimed even by families with little or no tax liability, resulting in a direct refund.
To qualify as a “child with special needs,” the adopted child must meet at least one of the following criteria:
- The child is age five or older at the time the adoption order is issued.
- The child is under age 18 and has a documented physical, mental, or emotional disability.
- The child is part of a sibling group that is placed together for adoption.
Agricultural off-highway gas/undyed diesel credit
Agricultural businesses in Utah may claim a fuel tax credit, allowing them to recover 36.5 cents per gallon for qualifying fuel.
This credit is intended explicitly for motor fuel and undyed diesel fuel used to operate stationary farm machinery or self-propelled farm machinery used solely for non-highway agricultural purposes. To be eligible, the fuel must have been purchased in Utah, and all fuel taxes must have been paid at the time of purchase.
Farm operation hand tools credit
Utah offers a valuable, refundable credit that provides a refund for sales and use tax paid on specific agricultural tools.
This credit applies to any hand tool that meets two key requirements: it must be used primarily and directly for Utah farming operations, and the unit purchase price must be more than $250. Because the credit is refundable, it is a highly beneficial resource for agricultural businesses, even those with limited tax liability.
Renewable energy systems tax credit (Expired)
The Utah Residential Energy System Tax Credit (RESTC)—formerly the solar tax credit—expired for residential solar PV systems installed after January 1, 2024. While past credit amounts ranged from $400 to $2,000, depending on the installation year, the state no longer offers this incentive for new home solar installations.
However, homeowners can still take advantage of the substantial Federal Residential Clean Energy Credit (formerly the ITC). This credit offers 30% of the cost for solar and battery storage systems with no dollar cap through 2032.
Given recent federal legislative proposals that could prematurely eliminate the 30% credit as early as the end of 2025, homeowners should consider acting quickly to secure this maximum incentive.
At-home parent credit
The Utah At-Home Parent Tax Credit offers a non-refundable $100 credit for each child who is 12 months old or younger on the last day of the tax year. This credit is designed to provide modest relief to families who prioritize at-home care for their infants.
To qualify, all of the following conditions must be met: the household’s Federal Adjusted Gross Income (AGI) must be $50,000 or less, and the sum of the at-home parent’s total wages and business income must be $3,000 or less. The credit applies to a wide range of caregivers, including biological, adoptive, foster, and legal guardians.
Refundable adoption expenses credit
This valuable credit allows families to claim up to $3,500 in qualified adoption expenses. Crucially, the credit is refundable, making it a meaningful benefit for qualifying families regardless of their total tax liability.
The credit is primarily aimed at moderate-income families and is reduced for those whose Federal AGI exceeds:
- $55,000 (Married Filing Jointly)
- $27,500 (Single or Head-of-Household)
You must also adhere to strict exclusion rules: you cannot claim expenses that federal or state adoption assistance programs have already covered, and you cannot take double credits by claiming the exact costs under the federal adoption tax credit. Furthermore, the credit cannot be claimed if you are married and file separately.
Combat‑related death credit
The Utah Combat-Related Death Tax Credit offers a non-refundable credit for service members who died in a combat zone on or after January 1, 2010.
The credit is equal to the amount of tax liability on the return that is directly attributable to the deceased service member’s income for the taxable year of death. For surviving spouses filing jointly, Utah requires the use of income allocation rules to determine the exact amount of the tax liability belonging to the deceased service member, ensuring the credit accurately offsets the tax on their earnings.
Employing persons who are homeless credit
Utah employers are eligible for the Homeless Hiring Tax Credit (HHTC), a non-refundable credit of up to $2,000 per qualifying hire. This incentive is designed to encourage businesses to hire individuals who are homeless, supporting their transition into stable employment.
To claim the credit, employers must:
- Obtain a Tax Credit Certificate from the Utah Department of Workforce Services (DWS). It confirms the employee meets the state’s specific definition of “homeless” and that the employer has satisfied the minimum wage requirements.
- Employ a Qualifying Person who meets the specific state definition of a person who is homeless.
The credit is non-refundable, meaning it can only be used to offset the employer’s tax liability. However, any unused credit may be carried forward for up to five subsequent taxable years, allowing businesses to maximize the benefit over time.
Gold and silver coin sales credit
Utah offers a specialized non-refundable credit equal to 4.55% of the net capital gains recognized from the sale of US-issued gold and silver coins for another form of legal tender. This credit is handy for high-net-worth investors holding precious metals, as it effectively offsets the state’s income tax liability on these specific investment profits.
The credit is apportionable and non-refundable, meaning it can reduce your state tax liability to zero, but you will not receive any unused amount as a refund. Importantly, you may not carry forward or carry back any amount of this credit that exceeds your tax liability for the current year.
Military survivor benefits credit
Utah offers a non-refundable tax credit equal to 4.55% of the total survivor benefits received by the beneficiary of the deceased service member.
This credit is designed to provide relief to families receiving military survivor benefits, such as those paid by the Department of Veterans Affairs (VA). However, it is not available if the deceased service member was retired from the military before their passing.
The credit is non-refundable, meaning it can reduce your state income tax liability to zero, but you will not receive the amount exceeding your tax due as a refund.
Federal Rebates, Incentives, and Tax Credits (2024–2025)
These credits complement Utah programs and can meaningfully reduce tax liability, especially when planned strategically.
Federal earned income tax credit (EITC)
The EITC is a fully refundable credit designed to support low- and moderate-income workers. The maximum credit is adjusted annually and can be as high as $8,046 for 2025 (depending on filing status and number of qualifying children). The EITC is particularly valuable because its fully refundable status means taxpayers can receive the credit amount as a refund even if they owe no tax.
Most high-income households will not qualify, as eligibility is tied to strict income limits. For the 2025 tax year, the maximum income threshold is approximately $68,675 (for a married couple filing jointly with three or more children). Taxpayers should consult the current IRS tables to verify their eligibility based on their specific filing status and family size.
Federal child tax credit
The Federal Child Tax Credit (CTC) offers up to $2,200 per qualifying child under the age of 17 for the 2025 tax year. This credit is partially refundable, allowing eligible low-income families to receive up to $1,700 per child as a refund (known as the Additional Child Tax Credit).
For higher-income households, the full credit is available until the MAGI reaches the following thresholds, after which the credit begins to phase out:
- $200,000 (Single or Head-of-Household filers)
- $400,000 (Married Filing Jointly)
Federal adoption tax credit
The credit provides up to $17,280 (up from $16,810 in 2024) per child for qualified adoption expenses. This credit is available for both international and domestic adoptions.
Refundability and Carryover
- Partially refundable: A significant update for the 2025 tax year makes the credit partially refundable, allowing eligible families to receive up to $5,000 as a direct refund, even if they owe no federal tax.
- Carryforward: Any non-refundable amount of the credit that cannot be used in the current year can be carried forward for up to five subsequent years.
The credit is subject to a MAGI phase-out, which is indexed for inflation. High earners should review their eligibility closely, as the credit is gradually reduced:
| Eligibility Status | MAGI Range |
| Full Credit Available | Up to $259,190 |
| Credit Phased Out | Between $259,190 and $299,190 |
| No Credit Available | $299,190 or more |
The credit may also be claimed in full for adoptions of a child with special needs, regardless of the actual expenses incurred.
Credit for other dependents
The Credit for Other Dependents provides a non-refundable $500 credit for each qualifying dependent who does not meet the criteria for the primary CTC. It typically includes:
- Older children (age 17 or older).
- Elderly parents or other qualifying relatives who live with or are supported by the taxpayer.
Crucially, the credit is subject to the same MAGI phase-out thresholds as the CTC:
- $200,000 (Single, Head-of-Household, or Married Filing Separately)
- $400,000 (Married Filing Jointly)
High-net-worth filers should ensure they accurately calculate their MAGI, as this credit can still provide a valuable reduction in their tax liability even when the larger CTC has fully phased out.
Electric vehicle (EV) tax credit (Up to September 30, 2025)
The federal government offers substantial, non-refundable tax credits for clean vehicles. However, the program is subject to strict vehicle and income limitations and is currently scheduled to expire on September 30, 2025.
New Clean Vehicle Credit (Up to $7,500)
This credit offers up to $7,500 for new, qualifying electric vehicles (EVs). Eligibility is subject to two sets of strict limits:
MSRP Limit
- SUVs, Vans, Trucks: $80,000
- Sedans and Other Vehicles: $55,000
MAGI Limit
- Married Filing Jointly: $300,000
- Head of Household: $225,000
- Single/Other Filers: $150,000
Used Clean Vehicle Credit (Up to $4,000)
This credit offers up to $4,000 (or 30% of the sale price, whichever is less) for used, qualifying EVs. This credit has significantly lower income limits:
- Married Filing Jointly: $150,000
- Head of Household: $112,500
- Single/Other Filers: $75,000
Buyers can use their MAGI from the year of delivery or the preceding year, whichever is less, to determine eligibility.
Premium tax credit (PTC)
The Premium Tax Credit (PTC) is a fully refundable credit designed to lower the cost of monthly health insurance premiums purchased via the ACA Health Insurance Marketplace.
Eligibility for the credit is based on three main factors, all of which are subject to temporarily enhanced rules:
- Income eligibility: Generally, household income must be at or above 100% of the Federal Poverty Level (FPL). Crucially, the temporary 400% FPL cap has been eliminated through 2025, allowing taxpayers with household income above 400% FPL to qualify if their benchmark plan premium would otherwise exceed 8.5% of their income.
- Coverage status: You cannot be eligible for other “minimum essential coverage,” such as affordable employer-sponsored coverage, Medicare, or Medicaid.
- Enrollment: You must be enrolled in a health plan through a state or federal Health Insurance Marketplace.
The PTC is particularly valuable because it is fully refundable, meaning if the credit amount is more than your tax liability, you get the difference back as a refund. Taxpayers can also receive the credit in advance (APTC) to lower their monthly premium payments during the year.
American Opportunity Tax Credit (AOTC)
The AOTC is a valuable federal education tax credit worth a maximum of $2,500 per eligible student annually. This credit is designed to help cover qualified tuition, fees, and course materials paid during the first four years of higher education.
Refundability and Limits
- Partial refundability: Up to $1,000 of the credit is refundable. If the credit reduces your tax liability to zero, you can still receive up to $1,000 of the remaining credit amount as a cash refund.
- Duration limit: The credit is strictly limited to the first four tax years of post-secondary education for each eligible student.
- Income phase-out: The credit is subject to a MAGI phase-out, which begins at $80,000 for single filers and $160,000 for those married filing jointly.
Lifetime learning credit (LLC)
The Lifetime Learning Credit (LLC) is a federal education tax credit worth up to $2,000 per tax return annually. Unlike the AOTC, the LLC is highly flexible and can be claimed for qualified expenses for undergraduate, graduate, or professional education, with no limit on the number of years it can be claimed.
Key Characteristics
- Credit calculation: The maximum $2,000 credit is calculated as 20% of the first $10,000 in qualified education expenses paid for all eligible students on the return.
- Non-refundable status: The LLC is non-refundable. It can reduce your tax liability to zero, but any remaining credit will not be paid out as a refund.
- Income limits: The credit is subject to a MAGI phase-out, which is generally eliminated for single filers with MAGI over $90,000 and for married filers with MAGI over $180,000.
Work Opportunity Tax Credit (WOTC)
The Federal Work Opportunity Tax Credit (WOTC) is a valuable non-refundable incentive for employers who hire workers from certain designated target groups.
The credit is calculated based on the employee’s first year of qualified wages, up to a maximum of $6,000 for most target groups, using the following two tiers:
- Full credit (40%): Employers can claim 40% of up to $6,000 in wages (a maximum of $2,400) for employees who work 400 hours or more during their first year of employment.
- Partial credit (25%): Employers can claim 25% of up to $6,000 in wages (a maximum of $1,500) for employees who work at least 120 hours but less than 400 hours.
The credit amount may be higher—up to $9,600—for certain high-value target groups, such as long-term unemployed veterans. To claim the WOTC, the employer must first obtain certification that the new hire belongs to one of the eligible target groups (e.g., veterans, ex-felons, or long-term unemployment recipients).
Federal investment tax credit (ITC)
The Federal Investment Tax Credit (ITC) provides a substantial 30% credit for the cost of installing commercial and utility-scale clean energy systems. This credit is uncapped and is available for various projects, including:
- Solar (Photovoltaic) and Wind energy systems
- Geothermal heat pumps
- Energy Storage (Battery) systems
The base credit amount is 6%, but it increases to 30% if the project meets specific prevailing wage and apprenticeship requirements. Although the ITC is non-refundable (it can only offset taxes owed), any unused credit can be carried forward for up to 20 years, making it a critical tool for long-term project financing and planning. The 30% rate is currently scheduled to remain in effect through 2032.
Energy-efficient home improvement credit
The Energy-Efficient Home Improvement Credit provides a non-refundable credit of up to 30% of qualified home upgrades. This incentive is designed to encourage homeowners to make their residences more energy-efficient.
The credit is subject to an annual limit, meaning you can claim the maximum amount each year you make qualifying improvements. The yearly caps are:
- $1,200 for building envelope improvements (e.g., qualifying windows, doors, and insulation)
- $2,000 for qualified heat pumps and biomass stoves/boilers (part of the overall $3,200 limit for HVAC systems)
- $3,200 is the combined annual cap for all eligible improvements
Qualified improvements must be made to an existing home that is your primary residence in the United States.
Federal research & development (R&D) tax credit
The R&D Tax Credit is a powerful, dollar-for-dollar incentive for businesses that invest in innovation and process improvement.
The credit is based on Qualified Research Expenses (QREs), which are defined under Internal Revenue Code (IRC) Section 41. Qualifying costs generally include:
- Employee Wages for time spent directly conducting, supervising, or supporting qualified research.
- Supplies and raw materials consumed during the research and development process.
- Contracted Research expenses paid to a third party (generally eligible up to 65% of the cost).
The credit can be applied in two ways:
- Income tax reduction: It results in a dollar-for-dollar reduction in a company’s federal income tax liability.
- Payroll tax offset: Qualifying small businesses (generally those with less than $5 million in gross receipts and under five years of revenue) can elect to apply a portion of the credit against their employer portion of payroll taxes. It provides an immediate cash flow benefit, which is especially critical for startups and pre-revenue companies.
Proactive planning ensures that expenditures—which are subject to strict standards under IRC §41 and §174 (concerning the definition of research costs)—are accurately documented to maximize the claimed credit.
Smart Earners Don’t Overpay
A crucial part of wealth management is maximizing the extensive tax opportunities available under Utah and federal programs. However, navigating the complex web of eligibility rules, income thresholds, phase-outs, and timing strategies can be overwhelming for high-income individuals and business owners.
Tencap simplifies this process. We specialize in optimizing these incentives through personalized tax planning and integrated wealth strategies. We ensure you maximize available credits, avoid common filing mistakes, and seamlessly incorporate tax efficiency into your broader retirement and investment plan.
Schedule a consultation with a Tencap advisor today to start building a smarter, more tax-efficient financial future.
FAQs
1. What Utah tax credits can I claim in 2025?
Utah offers credits for dependents, children, adoption expenses, and certain household costs. Eligibility is determined by income, filing status, and the presence of qualifying dependents.
2. How do Utah rebates work for households?
Utah rebates help offset the costs of home improvements, energy-efficient upgrades, or renewable energy systems. After completing eligible projects, you submit receipts and documentation to receive a rebate payment.
3. Who qualifies for the Federal Adoption Tax Credit?
Taxpayers who finalize an adoption during the tax year may qualify. The credit can cover adoption fees, court expenses, travel, and related costs for children under 18 or those unable to care for themselves.
4. What expenses count toward the R&D Tax Credit?
Qualified research expenses include work that meets IRC §174 requirements—such as experimentation, technological development, and improvements to products, processes, or software—performed in-house or by subcontractors.
Disclaimer: The information contained herein should in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents of any State other than the State of Utah or where otherwise legally permitted. All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or an indication of future results. Moreover, this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. Purchases are subject to suitability. This requires a review of an investor’s objective, risk tolerance, and time horizons. Investing always involves risk and possible loss of capital.
Nick Carrigan
Nick trains and develops families in creating, maintaining, and growing wealth. This includes educating clients on the science and academics of investing, comprehensive financial planning, and ongoing coaching to ensure discipline for a lifetime. Nick has seen this create incredible levels of freedom, fulfillment, and love for the families he works with.
