Utah FICA and Medicare Tax

If you work in Utah, your employer will deduct money from each paycheck to pay Social Security and Medicare taxes. These deductions are called withholding, and they make up a significant part of your take-home pay. FICA taxes are split between the employee and employer and fund Social Security and Medicare. Social Security taxes have a wage limit, while Medicare taxes do not.

Employers in Utah must withhold the correct amount of taxes from each employee based on their filing status and allowances claimed on Form W-4. The state tax commission determines the withholding rates. If you are an employer, you must report employment taxes quarterly on Form 941 or annually on Form 944. You must also submit an annual reconciliation with the state using electronic form TC-941E. This reconciliation is due by January 31 of the year following the year wages were paid. You may be eligible to claim a deduction for FICA taxes if you are a military spouse. 

How Much of My Social Security is Taxable in Utah?

In Utah, Social Security benefits are taxed at ordinary income rates. This is true for single and married filers alike, regardless of their tax brackets. The state also taxes Social Security benefits at the same flat rate as its income tax, which is 4.65% this year. Its sales taxes are above the national average, while its property tax rates are relatively low.

Many retirees may find that their Social Security income is not fully tax-free, but a little planning can help them reduce this burden. For example, some people can reduce their taxable income by withholding more from each paycheck or investing extra money in a high-interest savings account. If needed, they can also reduce the amount they receive from the Social Security administration.

Utah is one of 11 states that impose income taxes on Social Security benefits. While it is a small percentage of total retirement income, this tax can still stung some older residents. Fortunately, there is bipartisan support for eliminating this tax, and a recent poll showed that most voters support doing so.

Managing payroll taxes can be a daunting task for small businesses. From income tax withholding to FICA and unemployment insurance taxes, many moving parts need to be managed correctly. Rippling makes this process much easier by providing a comprehensive solution that automates all tax payments and filings.