Utah tips tax calculator: no effect on the TC-40
The Utah State Tax Commission told preparers in January 2026 that the new federal deductions “will have no effect on the Utah return as they are a ‘below the line’ deduction.”
Utah starts from federal AGI
Utah computes its tax from federal adjusted gross income, which still includes tips; only changes to AGI or the standard or itemized deduction affect the TC-40. Utah lowered its flat rate to 4.5% for 2025 under HB 106 and had enacted no tips subtraction when we checked. Because the taxpayer tax credit phases out as income rises, tips that remain in Utah income can also shrink that credit.
Utah figures
| Cash wage / minimum | $2.13 / $7.25 |
|---|---|
| In force | July 1, 2026 |
| Next change | none scheduled |
| Tipped threshold | More than $30 a month in tips |
| Tips on the 2025 return | tips stay taxable in this state. Tax Commission: these deductions “will have no effect on the Utah return as they are a ‘below the line’ deduction.” Source: Utah State Tax Commission |
| Tips on the 2026 return | tips stay taxable in this state. No Utah tips subtraction had been enacted when we checked. Source: Utah State Tax Commission |
Tipped pay
Utah’s minimum wage act follows the federal rate and excludes FLSA-covered employment, so tipped workers receive at least $2.13 in cash with a $5.12 credit.
A Park City server
$25,000 of ski-season tips — exactly the cap — save $2,870 federally; Utah taxes them. A busy 32-hour week with $300 of tips needs no make-up.
Check a Utah workweek
Where these figures come from
- Utah State Tax Commission · Utah Labor Commission
- January 2026 Webinar — 2025 Utah Tax Updates (2026-01-15)
- Minimum Wages for Tipped Employees (table by state) (2026-07-01)
Federal rules: how the deduction works. Nearby: Idaho, Wyoming, Colorado, Arizona, Nevada.
Figures verified against primary sources on