I live in Utah, and I have heard of a "Utah dependent exemption". This is listed online as $579 per qualifying dependent. Why isn't this being used in my state return?

[DMarkM1]

If you have dependents on your federal return those dependents would have transferred over to your UT state return and the exemption amounts applied.  Where are you looking to see that the exemption did not apply?  

[bholt3 · Accepted solution]

I thought my tax burden would be less than the state income tax rate after applying this deduction, but it did not change. The income tax rate in Utah is a flat 4.95% for 2019, and my taxes came out to be exactly 4.95% of federal AGI (plus state additions). After doing some more research yesterday, I found that the state deductions/exemptions are phased out after certain income levels. My income level was too high last year for any of the state deductions to apply. On the UT TC-40 form it is called a "phase out" amount, and if that amount is higher than the amounts of credits/deductions you are looking for, then it leaves your tax burden unchanged. 

In short, my dependents were transferred appropriately and everything is fine, I just didn't understand how the phase out amount worked in my state.