The 2023 picture for Utah residents
In 2023, Utah residents paid federal ordinary income tax at brackets topping out at 37%, plus Utah state tax up to 4.65%, plus Medicare (1.45% + 0.9% additional above $200k single MAGI), plus a federal supplemental-withholding layer on RSU-style income.
2023 supplemental withholding
The federal 22% flat supplemental-withholding rate applied to RSU vests up to $$1,000,000 of year-to-date supplemental wages. Above that threshold, the rate stepped up to 37%. A senior tech earner in $Utah receiving $300k of base and $400k of RSU income $at 4.65% state tax typically under-withheld by tens of thousands and covered the gap through Q4 estimated payments or additional W-4 withholding.
Safe harbor in 2023
The safe-harbor rule in 2023 required paying either 90% of current-year tax or 110% of prior-year tax (for AGI above $150k) to avoid underpayment penalties under IRC §6654. Many equity earners in Utah relied on the 110%-of-prior-year route because current-year tax was hard to estimate before the Q4 vest.
Frequently asked
- What supplemental-wage withholding rate applied to RSU income in Utah in 2023?
- The federal supplemental-wage withholding rate was 22% on the first $1,000,000 of supplemental wages per calendar year, rising to 37% above that. Utah state withholding ran up to 4.65% at the top bracket.
- Did Utah recognize federal QSBS exclusion in 2023?
- Utah's conformity status varies year by year and by type of taxpayer. As of 2023, most states other than California, New Jersey, Pennsylvania, and Mississippi either conformed fully or partially to Section 1202. Check the 2023 filing instructions for the specific language.
- What was the top federal ordinary bracket in 2023, and how did it apply to Utah residents?
- The 37% federal ordinary bracket started around $609,350 of taxable income for single filers in 2023. Utah stacked 4.65% on top of that for high earners, producing a combined top marginal rate of approximately 41.6%.