Look out! Utah is not very favorable at all to retirees, from an income tax perspective. In fact, Kiplingers ranks it in the bottom quintile for least favorable taxed states for retirees.
First off, ALL of Social Security is included in taxable income. Yes, there is a retirement tax credit of $900 but it begins to get phased out if your AGI is over $32k for married couples. (Remember AGI is BEFORE you take standard deductions so AGI of $32k is not much income at all.)
It goes without saying that if Social Security is fully taxed than all other forms of income will be fully taxed as well.
Property taxes are low, at .65%. So that’s good. Not much of a homestead exemption though. You can’t have more than $32k of income to qualify. Whether this is gross or taxable income I do not know however.
Lastly, sales tax is moderately low, coming in at 29 for all 50 states. Food is taxed in Utah too.
A couple things to keep in mind, UTAH hammers you on income tax. However, as I’ve stated time and again, income tax planning is something you CAN do to prepare.
I know it’s a broken record, but maximizing Social Security and Roth IRAs are what you need to be looking at NOW to reduce your income tax burden in the future.
However, other aspects that are out of your control, sales and property taxes, are actually quite reasonable if not outright low in Utah.
I’d rather be in a low property and sales tax state with a high income tax than the other way around. Thus in my mind Utah comes in favorably, even though Kiplingers disagrees.
See video here.