Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 adam.c.proffitt@ks.gov
Topeka, KS 66612 http://budget.kansas.gov
Adam Proffitt, Director Laura Kelly, Governor
Division of the Budget
January 25, 2023
The Honorable Adam Smith, Chairperson
House Committee on Taxation
300 SW 10th Avenue, Room 346-S
Topeka, Kansas 66612
Dear Representative Smith:
SUBJECT: Fiscal Note for HB 2109 by House Committee on Taxation
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2109 is
respectfully submitted to your committee.
Under current law, taxpayers filing as single, head of household, married filing separate,
or married filing jointly are allowed to subtract the full amount of Social Security benefits from
federal adjusted gross income for Kansas income tax purposes, if the taxpayer has income of
$75,000 or less. HB 2109 would reduce the subtraction modification of Social Security benefits
from federal adjusted gross income by a mathematical formula for incomes above the $75,000
threshold and below $100,000 for all taxpayers beginning in tax year 2023. This will allow
taxpayers with income of $75,000 up to $100,000 to subtract a portion of Social Security benefits
from federal adjusted gross income.
Estimated State Fiscal Effect
FY 2023
SGF
FY 2023
All Funds
FY 2024
SGF
FY 2024
All Funds
Revenue -- -- ($20,500,000) ($20,500,000)
Expenditure -- -- $36,530 $36,530
FTE Pos. -- -- -- --
The Department of Revenue estimates that HB 2109 would decrease State General Fund
revenues by $20.5 million in FY 2024, $16.0 million in FY 2025, and $16.1 million in FY 2026.
To formulate these estimates, the Department reviewed data on Social Security benefits from tax
year 2020. The Department adjusted the amount of Social Security benefits to account for cost- The Honorable Adam Smith, Chairperson
Page 2—HB 2109
of-living adjustments that have occurred since tax year 2020 and used an average growth rate of
2.0 percent for future years. The Department created a simulated tax table for all taxpayers that
receive Social Security benefits that shows that State General Fund revenues would decrease by
$15.8 million in tax year 2023 as a result of this bill. The individual income tax estimate for FY
2024 includes 100.0 percent of tax year 2023 tax liability and 30.0 percent of tax year 2024 tax
liability. The individual income tax estimate for FY 2025 includes 70.0 percent of tax year 2024
tax liability and 30.0 percent of tax year 2025 tax liability. The Department estimates that the
number of tax returns grows approximately 1.0 percent each year
The Department indicates that the bill would require $36,530 from the State General Fund
in FY 2024 to implement the bill and to modify the automated tax system. The required
programming for this bill by itself would be performed by existing staff of the Department of
Revenue. In addition, if the combined effect of implementing this bill and other enacted legislation
exceeds the Department’s programming resources, or if the time for implementing the changes is
too short, additional expenditures for outside contract programmer services beyond the
Department’s current budget may be required. The fiscal effect associated with HB 2109 is
reflected in The FY 2024 Governor’s Budget Report.
Sincerely,
Adam Proffitt
Director of the Budget
cc: Tamara Emery, Department of Administration
Lynn Robinson, Department of Revenue