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Summary of differences between federal and state regulations
Income tax withholding
An employer must withhold state income tax if the employer:
- Does business in Utah, or obtains any income from Utah sources; and
- Pays wages to individuals who perform services for that employer, within or outside the state of Utah, on an employer/employee basis.
The State of Utah uses the definition of wages as defined in the Internal Revenue Code, Section 3401. In short, wages means, “all remuneration (other than fees paid to a public official) for services performed by an employee for his employer, including cash value of all remuneration (including benefits; i.e. pensions, bonuses) paid in any medium other than cash...” Please refer to IRS Code Section 3401 for the full definition of wages, and Utah Tax Code §59-10-401, 404, and 405.
Any employer who does business in Utah for 60 days or less during a calendar year may be exempt from withholding requirements. To be exempt, the employer must receive advance approval from the Tax Commission certifying they are exempt. Thereafter, if the employer does business exceeding 60 days, the employer is liable for all taxes due during the period of exemption. However, if “good cause” can be shown for exceeding the 60 days, the Tax Commission may extend the exemption for 30 days.
Unemployment taxes
All states finance UC primarily through contributions from subject employers on the wages of their covered workers. In addition, three states (Alaska, New Jersey, and Pennsylvania) collect contributions from employees. These taxes are deposited by the state to its account in the UTF in the Federal Treasury, and are withdrawn as needed to pay benefits.
Many states have adopted a higher tax base than what is provided in FUTA. Hawaii's wage base is usually higher and changes periodically. In all states, an employer pays a tax on wages paid to each worker within a calendar year up to the amount specified in state law. In addition, most of the states provide an automatic adjustment of the wage base if federal law is amended to apply to a higher wage base than that specified under state law. As a result of the many variables in states taxable wage bases and rates, benefit formulas, and economic conditions, actual tax rates vary greatly among the states and among individual employers within a state.
Wages subject to unemployment tax in this state equal $22,700.
Minimum and maximum rates in this state are 0.3 and 9.3 %. Rates apply to experience rated employers only and do not include applicable surtaxes or penalties.
State
Contacts
Income tax withholding
State Tax Commission
Unemployment taxes
Department of Workforce Services
Regulations
Income tax withholding
Utah Tax Code 59-10, Individual Income Tax Act
Utah Tax Code 59-10-402, Requirement of withholding
Unemployment taxes
Title R994, Workforce Services, Workforce Information and Payment Services
Federal
ContactsInternal Revenue Service
Regulations Title 26 Code of Federal Regulations, Internal Revenue