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28 April 2025

Utah Tax Commission releases revised withholding formula reflecting lower income tax rate for 2025

The Utah State Tax Commission has updated Publication 14, Withholding Tax Guide, which contains the revised withholding formula and tables resulting from the decrease in the personal income tax rate effective retroactive to January 1, 2025. The updated withholding formula/tables apply to payroll periods beginning on and after June 1, 2025.

Background

On March 26, 2025, Utah Governor Spencer Cox signed into law H.B. 106 which, retroactive to January 1, 2025, lowers the state's personal and corporate income tax rate from 4.55% to 4.5%.

Also under HB 106, and effective January 1, 2025, employers with qualified childcare expenditures may be eligible to claim a nonrefundable income tax credit equal to 10% of qualified childcare expenditures and 20% of the expenditures to acquire, construct, rehabilitate or expand property for a qualified childcare facility. (See Tax Alert 2025-0852.)

Ernst & Young LLP Insights

Employers should consider notifying employees of the decrease in Utah's personal income tax rate prior to the payroll period when the lower rate will be used in the withholding calculation.

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Contact Information

For additional information concerning this Alert, please contact:

Workforce Tax Services - Employment Tax Advisory Services

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor

Document ID: 2025-0958

 

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