What are the deductions from income on the Utah TC-40 Return?
Interest from U.S. Government Obligations (code 71) Interest earned on U.S. Government obligations issued by an agency or instrumentality of the United States is exempt from state income tax. U.S. Government obligations include: Treasury bills, Treasury notes, and E, EE, H, HH and I bonds. Income NOT exempt from Utah state income tax includes: Interest or dividends from Federal National Mortgage Association (FNMA) and Government National Mortgage Association (GNMA); and Interest on refunds from the IRS or any federal agency. For further questions about taxability of interest income, you may use the following test developed by the U.S. Supreme Court in Smith vs. Davis, 323 U.S. 111 (1944) to determine if the instrument qualifies as a U.S. Government obligation. The instrument must: Be a written document, Bear interest, Contain a binding promise by the U.S. Government to pay a specific sum on a specific date, and Have congressional authorization to pledge the full faith and credit of the
