Updated October 7, 2026. Quick answer: Only if you live there. Utah’s own instructions say that “Income from Utah sources is taxable in Utah during the period of nonresidency”, while a Utah resident starts from federal adjusted gross income, which includes a pension earned in another state.
How Utah treats a pension earned elsewhere
| Item | What the state documents say |
|---|---|
| Nonresidents | The Utah instructions say a nonresident or part-year resident files a TC-40 when there is income from Utah sources. On the TC-40B nonresident schedule, the Utah column holds only income earned or received from Utah sources while not a Utah resident. The source says: “earned or received from Utah sources while not a Utah resident”. The nonresident rule rests on the Who Must File section and the TC-40B line instructions in the 2025 TC-40 booklet. The booklet does not mention pensions in that rule. |
| Residents with a pension earned elsewhere | A resident is a person domiciled in Utah, and the resident return starts from federal adjusted gross income, so a pension earned in another state is part of the starting figure. Utah then offers credits rather than a general exclusion: a retirement credit of up to $450 for a filer born on or before Dec. 31, 1952, a Social Security benefits credit and a military retirement credit, and the retirement credit cannot be combined with either of those two credits. This rests on the resident line 4 instructions and the credit instructions in the 2025 TC-40 booklet. A subtraction for previously taxed retirement income exists for rare cases where another state taxed the contributions. |
| Part-year residents (year of a move) | A part-year resident is a resident for part of the year and a nonresident for the rest. All income received during the period of residency is taxable in Utah regardless of where it is earned, unless specifically exempted, and income from Utah sources is taxable during the period of nonresidency. The source says: “All income received during the period of residency is taxable in Utah, regardless of where that income is earned, unless specifically exempted”. This rests on the part-year resident definition and the TC-40B instructions in the 2025 TC-40 booklet. |
| Rate | Utah’s 2025 TC-40 instructions have the filer multiply taxable income on line 9 by 4.5 percent (.045). The source says: “Multiply line 9 by 4.5 percent (.045)”. The booklet’s What’s New section says the 2025 Legislature passed HB 106, lowering the rate from 4.55 percent to 4.5 percent. |
| Return to file | Residents and part-year residents file Utah Form TC-40. Nonresidents and part-year residents with Utah income also attach Form TC-40B, the Non or Part-year Resident Schedule. The source says: “Attach form TC-40B to your return”. |
A $40,000 move-year example
A retiree receives $40,000 of pension in the year of a move: $20,000 before the move date, as an Utah resident, and $20,000 after leaving.
The first $20,000 can be taxed by Utah; the rest is outside its reach under the federal rule below. At the 4.5% rate printed for 2025, the tax on it is computed as $20,000 x 0.045 = $900, before any exclusion or credit. Federal tax still applies.
The federal rule that protects a nonresident
4 U.S.C. 114(a) bars a state income tax on retirement income of an individual “who is not a resident or domiciliary of such State”. Retirement income means any income from a qualified retirement plan, a simplified employee pension, a 403(a) or 403(b) plan, an individual retirement plan, an eligible 457 plan or a governmental plan. Income from a nonqualified deferred compensation plan counts only if it is part of a “series of substantially equal periodic payments” made for life or for a period of at least 10 years, or is a payment after termination of employment from a plan that exists only to provide benefits above the Internal Revenue Code limits, so not every payment is covered. Retired pay of a member of a uniform service is also covered.
Related: how Utah taxes retirement income, whether Utah taxes pensions, out-of-state pension tax by state, and deferred compensation lump sums after a move.
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Answer againSources
- 2025 TC-40 Utah Individual Income Tax Instructions (Utah State Tax Commission): https://tax.utah.gov/forms/current/tc-40inst.pdf
- 4 U.S.C. 114, Limitation on State income taxation of certain pension income (U.S. Government Publishing Office, 2023 edition): https://www.govinfo.gov/content/pkg/USCODE-2023-title4/html/USCODE-2023-title4-chap4-sec114.htm
Sources: the primary documents linked above, read on October 7, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.