Utah Tax Credits for Military Survivor Benefits and a Combat Related Death

Two credits that a family will not find unless someone tells them, and one of them is claimed on the decedent's own return. The survivor benefits credit, section 59-10-1036. A surviving spouse or dependent child may claim a nonrefundable credit for survivor benefits, and the credit equals "the amount of survivor benefits that the surviving spouse or dependent child received during the taxable year" multiplied by "the percentage listed in Subsection 59-10-104(2)", which is the flat income tax rate, 4.45 percent for 2026. As with the military retirement credit, the arithmetic cancels the Utah tax on the payments. Who qualifies is narrower than the name suggests. Subsection 2 allows the credit only if the benefits are paid due to "(a) the death of a member of the armed forces or reserve components while on active duty; or (b) the death of a member of the reserve components that results from a service-connected cause while performing inactive duty training." So a surviving spouse receiving Survivor Benefit Plan payments because a military retiree died years after retiring of an ordinary illness does not qualify under this section. The death must have been on active duty, or a reserve death from a service-connected cause during inactive duty training. That family is not out of luck, though, and this is the comparison to make. Section 59-10-1043, the military retirement credit, defines "military retirement pay" to include "survivor benefits", meaning the retired pay portion of 10 U.S.C. sections 1447 through 1455. A surviving spouse receiving Survivor Benefit Plan payments from a deceased retiree can look to that section instead. The trade-off is that section 59-10-1043 cannot be claimed in the same year as the general retirement credit in section 59-10-1019, while section 59-10-1036 carries no such bar. A surviving spouse who qualifies under both should work out which combination leaves the smaller bill. Definitions borrow from federal law. "Surviving spouse" and "dependent child" both mean the same as in 10 U.S.C. section 1447, and "reserve components" means the same as described in 10 U.S.C. section 10101. "Survivor benefits" means the amount paid by the federal government under 10 U.S.C. sections 1447 through 1455. Limits. Subsection 4: the credit "may not be carried forward or carried back", and it "applies to a taxable year beginning on or after January 1, 2017". It is nonrefundable. The combat related death credit, section 59-10-1027. This one is unusual in form. Subsection 2: "A claimant, estate, or trust that files a return on behalf of an individual who dies a combat related death may claim a nonrefundable tax credit against that individual's tax liability under this chapter." And subsection 3: "the tax credit is equal to the tax liability of the individual who dies a combat related death for the taxable year during which the individual dies." The entire Utah income tax liability of the person who died, for the year of death, is credited away. It is claimed on the decedent's return by whoever files it. What counts as a combat related death. Subsection 1, paragraph (b): an individual who dies on or after January 1, 2010, and either "while in military service in a combat zone" or "as a result of a wound, disease, or injury the individual incurs while in military service in a combat zone." "Combat zone" is defined in paragraph (c) as an area the President designates by Executive Order "as an area in which an active component of the United States Armed Forces or a reserve component of the United States Armed Forces are or have engaged in combat". "Military service in a combat zone" in paragraph (d) requires service in an active or reserve component performed on or after the date the President designates as the beginning of combatant activities and on or before the designated termination date. Read the second limb of the death definition carefully, because it is the one families miss. A veteran who was wounded in a combat zone and dies years later "as a result of a wound, disease, or injury the individual incurs while in military service in a combat zone" is within the section. The death does not have to happen in the zone or during service. What the section requires is causation traced back to a combat zone wound, disease or injury, and a death on or after January 1, 2010. "Active component of the United States Armed Forces" is defined in paragraph (a) as active duty service in the Army, Navy, Air Force, Marine Corps, Space Force or Coast Guard. The Space Force is named, and this definition is cross-referenced by the veteran employment credit in section 59-10-1031 and by the property tax chapter in section 59-2a-101. Neither credit is refundable and neither will generate a payment to a family with no Utah tax liability. Both are worth checking against the federal treatment first, because federal law forgives some tax on a combat zone death outright, and a liability forgiven federally may not appear in the Utah calculation at all.