Retiring in Utah: what taxes actually cost you
The short answer
On $80,000 of retirement income, Utah costs about $6,344 a year across state income, property and sales tax. That ranks 21 of 51, or $291 below the median state. State income tax alone is $3,046, which is 3.8% of gross income.
Run it on your own numbers
The figures above use a reference profile. Change them and every number on this page moves, including the ranking.
How Utah treats retirement income
Utah uses a flat 4.65% income tax, so the rate is the same on the first dollar and the last.
Social Security
Taxed as ordinary income
Pension income
Taxed as ordinary income
401(k) and IRA withdrawals
Taxed above $14,500 from age 65
Capital gains
Taxed as ordinary income
Property tax
Averages 0.57% of assessed value, so $2,280 a year on a $400K home.
Sales tax
State rate of 4.85%, before any local addition.
Worth knowing: Taxes Social Security (with credit for low income). Retirement credit available.
Where Utah sits against the rest
The spread across all 51 runs from $3,280 in Wyoming to $14,004 in Connecticut, a difference of $10,724 a year on the same income.
Five cheapest on these numbers
| State | Total tax |
|---|---|
| Wyoming | $3,280 |
| Nevada | $3,639 |
| Colorado | $4,009 |
| Tennessee | $4,310 |
| Louisiana | $4,678 |
Five most expensive on these numbers
| State | Total tax |
|---|---|
| Connecticut | $14,004 |
| New Jersey | $12,953 |
| Vermont | $12,755 |
| Kansas | $11,108 |
| Minnesota | $10,888 |
Worth keeping in proportion. The gap between the best and worst state here is real money, but it is smaller than the gap between two housing markets, and it is far smaller than the effect of your withdrawal rate. Safe withdrawal rate covers that one.
Common questions
Does Utah tax Social Security?
Yes. Utah taxes Social Security benefits as ordinary income, which is unusual: most states exempt them entirely. Federal tax may apply on top.
How much tax would a retiree pay in Utah?
On $80,000 of retirement income with a $400,000 home and $70,000 of annual spending, Utah works out at roughly $6,344 a year across income, property and sales tax. That ranks 21 of 51, against a median of $6,635.
Does Utah tax 401(k) and IRA withdrawals?
Yes, above an exemption. Utah allows $14,500 of retirement income to be excluded, from age 65. Withdrawals above that are taxed as ordinary income.
Is Utah a good state to retire in for taxes?
Around the middle of the pack. On the reference profile it costs $291 less than the median state, and $3,064 more than Wyoming, which is the cheapest. Tax is one input though. Cost of living, housing and proximity to family usually move a retirement budget further than the tax code does.
Retirement taxes in another state
Related: Taxes in retirement, Withdrawal order, Roth conversions, All 51 states.