Can creditors or a bankruptcy trustee still take your tax refund in Utah? The short answer: not the part that comes from the Earned Income Tax Credit or a child tax credit. As of May 6, 2026, Utah law exempts the full amount of any federal income tax refund attributed to those credits. Creditors cannot seize that money, and in a bankruptcy case filed on or after that date, the trustee cannot take it either. The new protection is found at Utah Code § 78B-5-505(1)(s), added by Senate Bill 112 in the 2026 General Session.

This is one of the biggest changes to Utah exemption law in years, and it matters most to the families who can least afford to lose a refund. Here is what changed, what is protected, and what it means if you are considering bankruptcy in Utah.

What the law used to be

Until this year, Utah had no exemption for tax refunds. None. If you filed Chapter 7 bankruptcy, any refund you were owed, including the portion that came from the Earned Income Tax Credit and the Child Tax Credit, belonged to the bankruptcy trustee. Trustees collected those refunds and paid them to creditors. Outside of bankruptcy, a creditor with a judgment could garnish a bank account the day your refund landed in it.

That put Utah behind most of the country. The majority of states already shielded these credits, because Congress designed them to help working parents cover rent, groceries, and child care, not to pay old debts.

Our office spent years telling clients the same thing every tax season: receive your refund first, spend it on necessities, keep the receipts, and only then file your case. Careful timing was the only protection available.

What the new law says

Senate Bill 112, sponsored by Senator Todd Weiler and Representative Nelson Abbott, passed in the 2026 General Session and took effect on May 6, 2026. It amends the Utah Exemptions Act to protect:

“the full amount of any federal income tax refund attributed to an earned income tax credit or any child tax credit... whether as a refundable tax credit or as a nonrefundable reduction in tax.” (Utah Code § 78B-5-505(1)(s))

Three things stand out in that language. First, it covers the full amount, with no dollar cap. Second, it covers the Earned Income Tax Credit and any child tax credit, including the refundable Additional Child Tax Credit. Third, it applies whether the credit arrives as a refund check or simply reduced the tax you owed.

How much money are we talking about?

For 2025 tax returns filed in early 2026, the Earned Income Tax Credit pays up to $8,046 for a family with three or more children. The Child Tax Credit is worth $2,200 per child, up to $1,700 of which is refundable. A working family with three kids can easily have more than $10,000 of a refund attributable to these two credits. Before May 6, 2026, every dollar of that was exposed. Now it is protected.

What this means if you file bankruptcy in Utah

Utah is an opt-out state, which means Utah's exemption list is the one that counts in bankruptcy. Because of that, the new exemption applies directly in bankruptcy cases filed on or after May 6, 2026.

In Chapter 7: The trustee can no longer claim the portion of your refund that comes from the EITC or child tax credits. That is true even if you file in the middle of tax season with a large refund on the way. The portion of a refund that comes from ordinary over-withholding of your paycheck is still not exempt, so the timing of your filing still matters. It just matters a lot less for working parents than it used to. Our Chapter 7 FAQ covers how refunds are handled in more detail.

In Chapter 13: Tax refunds in Chapter 13 are handled through your repayment plan, and Utah trustees generally expect refunds to be turned over during the case. How the new exemption interacts with those plan obligations is something to go over with your attorney, because it depends on your plan terms and when your case was filed. Our Chapter 13 FAQ explains the refund turnover rules.

If you filed before May 6, 2026: The exemption snapshot in bankruptcy is taken on your filing date, so the new law does not reach back into older cases.

What this means if you are not in bankruptcy

The exemption is not just for bankruptcy. It protects these refunds from judgment creditors too. If a collector has sued you and is garnishing your bank account, the EITC and child tax credit portion of your federal refund is exempt from execution. If exempt refund money gets frozen or taken, you can claim the exemption, but you have to act quickly and you should keep the money identifiable. Depositing your refund into an account you do not mix with other funds makes that much easier.

What is still NOT protected

Be careful not to read the new law too broadly. It does not cover the portion of a federal refund that comes from over-withholding. It does not cover your Utah state tax refund. And it does not erase the general rule that money you are owed on the day you file bankruptcy becomes part of the bankruptcy estate. The exemption carves the EITC and child tax credit portion out of that estate. The rest still needs a plan, and that is where good advice before filing pays for itself.

Common questions

Do I have to do anything to claim the protection?
In bankruptcy, yes. The exemption must be claimed on Schedule C when your case is filed, and the credit portion of your refund should be documented from your tax return. That is part of what we do when we prepare your case.

Does it matter when I file my bankruptcy case?
Yes. The exemption applies to cases filed on or after May 6, 2026. And because over-withholding is still unprotected, the best filing date for you may still depend on where you are in the tax cycle.

Does the law protect my refund after I spend it?
The safest assumption is that protection is strongest while the refund is identifiable. If you need to spend it, spend it on necessities and keep records, the same advice we have always given.

Does this apply to debts like child support or taxes?
Exemptions have exceptions, and certain obligations are treated differently. If you owe domestic support or government debts, ask us how the exemption applies to your situation before you count on it.

Talk to us before you count on it

We have filed more than 5,800 bankruptcy cases in Utah since 1997, and we have watched too many families lose refunds they were counting on. This law changes that, but only if your case is planned around it correctly. Call or text us at (801) 388-0007. The consultation is free, and with true $0 down it costs nothing to find out exactly how much of your refund is now protected.

This article is general information about Utah law, not legal advice about your specific situation.