Kansas 2023-2024 Regular Session

Kansas House Bill HB2197 Compare Versions

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1	1	Session of 2023
2	2	HOUSE BILL No. 2197
3	3	By Committee on Financial Institutions and Pensions
4	4	1-26
5	5	AN ACT concerning financial institutions; relating to the first-time home
6	6	buyer savings account act; providing a procedure for the distribution of
7	7	the account balance upon the death of an account holder; changing the
8	8	term "transfer on death" to "payable on death" regarding beneficiaries;
9	9	resolving a conflict when beneficiaries differ on a financial institution's
10	10	account records and on first-time home buyer savings account tax
11	11	forms required by the secretary of revenue; amending K.S.A. 2022
12	12	Supp. 58-4903, 58-4904, 58-4906 and 79-32,117 and repealing the
13	13	existing sections.
14	14	Be it enacted by the Legislature of the State of Kansas:
15	15	Section 1. K.S.A. 2022 Supp. 58-4903 is hereby amended to read as
16	16	follows: 58-4903. (a) On and after July 1, 2022, any individual may open
17	17	an account with a financial institution and designate the account, in its
18	18	entirety, as a first-time home buyer savings account to be used to pay or
19	19	reimburse a designated beneficiary's eligible expenses for the purchase or
20	20	construction of a primary residence in this state. An individual may be the
21	21	account holder of multiple accounts and an individual may jointly own the
22	22	account with another individual if such individuals file a joint income tax
23	23	return. An account holder shall comply with the requirements of this act to
24	24	be eligible for the modifications set forth in K.S.A. 79-32,117, and
25	25	amendments thereto.
26	26	(b) (1) An account holder shall designate, no later than April 15 of the
27	27	year following the taxable year during which the account is established, a
28	28	first-time home buyer as the designated beneficiary of the account.
29	29	Nothing in this section shall prohibit an account holder from designating
30	30	such account holder as the designated beneficiary of an account. An
31	31	account holder may change the designated beneficiary at any time, but no
32	32	account shall have more than one designated beneficiary at any time. An
33	33	individual may be designated as the designated beneficiary of more than
34	34	one account if such accounts are held by separate account holders. No
35	35	account holder shall be authorized to designate the same designated
36	36	beneficiary on multiple accounts held by such account owner.
37	37	(2) The naming of a designated beneficiary shall not create a
38	38	survivorship interest in the account for such designated beneficiary. In the
39	39	event of the death of an account holder, the balance of such account shall
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76	76	be paid to the payable on death beneficiary in accordance with K.S.A. 9-
77	77	1215, and amendments thereto, or, in the absence of a named payable on
78	78	death beneficiary, in accordance with the provisions of the Kansas probate
79	79	code.
80	80	(c) (1) The following limits apply to an account established pursuant
81	81	to this act:
82	82	(A) The maximum contribution to an account in any tax year shall be
83	83	$3,000 for an individual and $6,000 for a married couple filing a joint
84	84	return;
85	85	(B) the maximum amount of all contributions into an account in all
86	86	tax years shall be $24,000 for an individual and $48,000 for a married
87	87	couple filing a joint return; and
88	88	(C) the maximum total amount in an account shall be $50,000.
89	89	(2) If a limit in paragraph (1) is exceeded, then thereafter all interest
90	90	or other income earned on the investment of moneys in an account shall be
91	91	subject to the tax imposed by the Kansas income tax act.
92	92	(3) Moneys may remain in an account for an unlimited duration
93	93	without the interest or income being subject to recapture or penalty.
94	94	(d) The account holder shall not use moneys in an account to pay
95	95	expenses of administering the account, except that a service fee may be
96	96	deducted from the account by a financial institution. The account holder
97	97	shall be responsible for maintaining documentation for the account and for
98	98	eligible expenses related to the designated beneficiary's purchase or
99	99	construction of a primary residence.
100	100	Sec. 2. K.S.A. 2022 Supp. 58-4904 is hereby amended to read as
101	101	follows: 58-4904. (a) (1) The moneys in a first-time home buyer savings
102	102	account may be:
103	103	(A) Used for eligible expenses related to a designated beneficiary's
104	104	purchase or construction of a primary residence located in this state;
105	105	(B) used for eligible expenses related to a designated beneficiary's
106	106	purchase or construction of a primary residence located outside of this
107	107	state if such designated beneficiary is active-duty military and was
108	108	stationed in Kansas for any time after the creation of the account;
109	109	(C) used for eligible expenses that would have qualified pursuant to
110	110	paragraph (1)(A) or (1)(B) but the contract for purchase or construction
111	111	did not close;
112	112	(D) transferred to another newly created account; and
113	113	(E) used to pay service fees assessed by the financial institution.
114	114	(2) This subsection shall apply even if a designated beneficiary is a
115	115	joint owner of a primary residence with another person who is not a
116	116	designated beneficiary of an account. Moneys in an account shall not be
117	117	used to purchase a manufactured or mobile home that is not taxed as real
118	118	property.
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162	162	(b) Moneys withdrawn from an account shall be subject to recapture
163	163	by the secretary in the tax year in which they were withdrawn if:
164	164	(1) At the time of the withdrawal, it has been less than a year since
165	165	the first deposit in the account; or
166	166	(2) the moneys are used for any purpose other than the expenses or
167	167	transactions authorized pursuant to subsection (a)(1).
168	168	(c) Moneys that are subject to recapture shall be an amount equal to
169	169	the moneys withdrawn from an account and shall be added to the Kansas
170	170	adjusted gross income pursuant to K.S.A. 79-32,117(b)(xxvii), and
171	171	amendments thereto, of the account holder or, if the account holder is no
172	172	longer living, the designated beneficiary. If any moneys are subject to
173	173	recapture, the account holder shall pay a penalty in the following amounts:
174	174	(1) If the withdrawal of moneys occurred 10 or less years after the first
175	175	deposit in the account, 5% of the amount subject to recapture; and (2) if
176	176	the withdrawal of moneys occurred more than 10 years after the first
177	177	deposit in the account, 10% of the amount subject to recapture.
178	178	(d) The penalties provided in subsection (c) shall not apply if: (1) The
179	179	withdrawn moneys are used for eligible expenses related to a designated
180	180	beneficiary's purchase or construction of a primary residence outside of
181	181	this state; or (2) the withdrawn moneys are from an account in which the
182	182	designated beneficiary died, and the account holder did not designate a
183	183	new designated beneficiary during the same tax year.
184	184	(e) If the account holder dies or, if the account is jointly owned and
185	185	the account owners die, and the account does not have a surviving transfer
186	186	payable on death beneficiary, then all of the moneys in the account
187	187	resulting from contributions or income earned from assets in the account
188	188	pursuant to K.S.A. 79-32,117, and amendments thereto, shall be subject to
189	189	recapture in the tax year of the death or deaths, but no penalty shall be
190	190	assessed pursuant to subsection (c).
191	191	Sec. 3. K.S.A. 2022 Supp. 58-4906 is hereby amended to read as
192	192	follows: 58-4906. (a) No financial institution shall be required to:
193	193	(1) Designate an account as a first-time home buyer savings account
194	194	or designate the beneficiaries of an account in the financial institution's
195	195	account contracts or systems or in any other way;
196	196	(2) track the use of moneys withdrawn from an account; or
197	197	(3) report any information to the department of revenue or any other
198	198	governmental agency that is not otherwise required by law.
199	199	(b) No financial institution shall be responsible or liable for:
200	200	(1) Determining or ensuring that an account holder is eligible for a
201	201	Kansas adjusted gross income modification pursuant to K.S.A. 79-32,117,
202	202	and amendments thereto;
203	203	(2) determining or ensuring that moneys in the account are used for
204	204	eligible expenses; or
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248	248	(3) reporting or remitting taxes or penalties related to the use of
249	249	account moneys.
250	250	(c) A financial institution may rely on such financial institution's
251	251	account records for determining a payable on death beneficiary for a first-
252	252	time home buyer savings account. If the payable on death beneficiary in a
253	253	financial institution's account records conflicts with the designated
254	254	beneficiary on any form required by the secretary under the first-time
255	255	home buyer savings account act, the payable on death beneficiary in such
256	256	financial institution's account records shall control.
257	257	Sec. 4. K.S.A. 2022 Supp. 79-32,117 is hereby amended to read as
258	258	follows: 79-32,117. (a) The Kansas adjusted gross income of an individual
259	259	means such individual's federal adjusted gross income for the taxable year,
260	260	with the modifications specified in this section.
261	261	(b) There shall be added to federal adjusted gross income:
262	262	(i) Interest income less any related expenses directly incurred in the
263	263	purchase of state or political subdivision obligations, to the extent that the
264	264	same is not included in federal adjusted gross income, on obligations of
265	265	any state or political subdivision thereof, but to the extent that interest
266	266	income on obligations of this state or a political subdivision thereof issued
267	267	prior to January 1, 1988, is specifically exempt from income tax under the
268	268	laws of this state authorizing the issuance of such obligations, it shall be
269	269	excluded from computation of Kansas adjusted gross income whether or
270	270	not included in federal adjusted gross income. Interest income on
271	271	obligations of this state or a political subdivision thereof issued after
272	272	December 31, 1987, shall be excluded from computation of Kansas
273	273	adjusted gross income whether or not included in federal adjusted gross
274	274	income.
275	275	(ii) Taxes on or measured by income or fees or payments in lieu of
276	276	income taxes imposed by this state or any other taxing jurisdiction to the
277	277	extent deductible in determining federal adjusted gross income and not
278	278	credited against federal income tax. This paragraph shall not apply to taxes
279	279	imposed under the provisions of K.S.A. 79-1107 or 79-1108, and
280	280	amendments thereto, for privilege tax year 1995, and all such years
281	281	thereafter.
282	282	(iii) The federal net operating loss deduction, except that the federal
283	283	net operating loss deduction shall not be added to an individual's federal
284	284	adjusted gross income for tax years beginning after December 31, 2016.
285	285	(iv) Federal income tax refunds received by the taxpayer if the
286	286	deduction of the taxes being refunded resulted in a tax benefit for Kansas
287	287	income tax purposes during a prior taxable year. Such refunds shall be
288	288	included in income in the year actually received regardless of the method
289	289	of accounting used by the taxpayer. For purposes hereof, a tax benefit shall
290	290	be deemed to have resulted if the amount of the tax had been deducted in
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334	334	determining income subject to a Kansas income tax for a prior year
335	335	regardless of the rate of taxation applied in such prior year to the Kansas
336	336	taxable income, but only that portion of the refund shall be included as
337	337	bears the same proportion to the total refund received as the federal taxes
338	338	deducted in the year to which such refund is attributable bears to the total
339	339	federal income taxes paid for such year. For purposes of the foregoing
340	340	sentence, federal taxes shall be considered to have been deducted only to
341	341	the extent such deduction does not reduce Kansas taxable income below
342	342	zero.
343	343	(v) The amount of any depreciation deduction or business expense
344	344	deduction claimed on the taxpayer's federal income tax return for any
345	345	capital expenditure in making any building or facility accessible to the
346	346	handicapped, for which expenditure the taxpayer claimed the credit
347	347	allowed by K.S.A. 79-32,177, and amendments thereto.
348	348	(vi) Any amount of designated employee contributions picked up by
349	349	an employer pursuant to K.S.A. 12-5005, 20-2603, 74-4919 and 74-4965,
350	350	and amendments thereto.
351	351	(vii) The amount of any charitable contribution made to the extent the
352	352	same is claimed as the basis for the credit allowed pursuant to K.S.A. 79-
353	353	32,196, and amendments thereto.
354	354	(viii) The amount of any costs incurred for improvements to a swine
355	355	facility, claimed for deduction in determining federal adjusted gross
356	356	income, to the extent the same is claimed as the basis for any credit
357	357	allowed pursuant to K.S.A. 79-32,204, and amendments thereto.
358	358	(ix) The amount of any ad valorem taxes and assessments paid and
359	359	the amount of any costs incurred for habitat management or construction
360	360	and maintenance of improvements on real property, claimed for deduction
361	361	in determining federal adjusted gross income, to the extent the same is
362	362	claimed as the basis for any credit allowed pursuant to K.S.A. 79-32,203,
363	363	and amendments thereto.
364	364	(x) Amounts received as nonqualified withdrawals, as defined by
365	365	K.S.A. 75-643, and amendments thereto, if, at the time of contribution to a
366	366	family postsecondary education savings account, such amounts were
367	367	subtracted from the federal adjusted gross income pursuant to K.S.A. 79-
368	368	32,117(c)(xv), and amendments thereto, subsection (c)(xv) or if such
369	369	amounts are not already included in the federal adjusted gross income.
370	370	(xi) The amount of any contribution made to the same extent the
371	371	same is claimed as the basis for the credit allowed pursuant to K.S.A. 74-
372	372	50,154, and amendments thereto.
373	373	(xii) For taxable years commencing after December 31, 2004,
374	374	amounts received as withdrawals not in accordance with the provisions of
375	375	K.S.A. 74-50,204, and amendments thereto, if, at the time of contribution
376	376	to an individual development account, such amounts were subtracted from
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420	420	the federal adjusted gross income pursuant to subsection (c)(xiii), or if
421	421	such amounts are not already included in the federal adjusted gross
422	422	income.
423	423	(xiii) The amount of any expenditures claimed for deduction in
424	424	determining federal adjusted gross income, to the extent the same is
425	425	claimed as the basis for any credit allowed pursuant to K.S.A. 79-32,217
426	426	through 79-32,220 or 79-32,222, and amendments thereto.
427	427	(xiv) The amount of any amortization deduction claimed in
428	428	determining federal adjusted gross income to the extent the same is
429	429	claimed for deduction pursuant to K.S.A. 79-32,221, and amendments
430	430	thereto.
431	431	(xv) The amount of any expenditures claimed for deduction in
432	432	determining federal adjusted gross income, to the extent the same is
433	433	claimed as the basis for any credit allowed pursuant to K.S.A. 79-32,223
434	434	through 79-32,226, 79-32,228 through 79-32,231, 79-32,233 through 79-
435	435	32,236, 79-32,238 through 79-32,241, 79-32,245 through 79-32,248 or 79-
436	436	32,251 through 79-32,254, and amendments thereto.
437	437	(xvi) The amount of any amortization deduction claimed in
438	438	determining federal adjusted gross income to the extent the same is
439	439	claimed for deduction pursuant to K.S.A. 79-32,227, 79-32,232, 79-
440	440	32,237, 79-32,249, 79-32,250 or 79-32,255, and amendments thereto.
441	441	(xvii) The amount of any amortization deduction claimed in
442	442	determining federal adjusted gross income to the extent the same is
443	443	claimed for deduction pursuant to K.S.A. 79-32,256, and amendments
444	444	thereto.
445	445	(xviii) For taxable years commencing after December 31, 2006, the
446	446	amount of any ad valorem or property taxes and assessments paid to a state
447	447	other than Kansas or local government located in a state other than Kansas
448	448	by a taxpayer who resides in a state other than Kansas, when the law of
449	449	such state does not allow a resident of Kansas who earns income in such
450	450	other state to claim a deduction for ad valorem or property taxes or
451	451	assessments paid to a political subdivision of the state of Kansas in
452	452	determining taxable income for income tax purposes in such other state, to
453	453	the extent that such taxes and assessments are claimed as an itemized
454	454	deduction for federal income tax purposes.
455	455	(xix) For taxable years beginning after December 31, 2012, and
456	456	ending before January 1, 2017, the amount of any: (1) Loss from business
457	457	as determined under the federal internal revenue code and reported from
458	458	schedule C and on line 12 of the taxpayer's form 1040 federal individual
459	459	income tax return; (2) loss from rental real estate, royalties, partnerships, S
460	460	corporations, except those with wholly owned subsidiaries subject to the
461	461	Kansas privilege tax, estates, trusts, residual interest in real estate
462	462	mortgage investment conduits and net farm rental as determined under the
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506	506	federal internal revenue code and reported from schedule E and on line 17
507	507	of the taxpayer's form 1040 federal individual income tax return; and (3)
508	508	farm loss as determined under the federal internal revenue code and
509	509	reported from schedule F and on line 18 of the taxpayer's form 1040
510	510	federal income tax return; all to the extent deducted or subtracted in
511	511	determining the taxpayer's federal adjusted gross income. For purposes of
512	512	this subsection, references to the federal form 1040 and federal schedule
513	513	C, schedule E, and schedule F, shall be to such form and schedules as they
514	514	existed for tax year 2011, and as revised thereafter by the internal revenue
515	515	service.
516	516	(xx) For taxable years beginning after December 31, 2012, and
517	517	ending before January 1, 2017, the amount of any deduction for self-
518	518	employment taxes under section 164(f) of the federal internal revenue
519	519	code as in effect on January 1, 2012, and amendments thereto, in
520	520	determining the federal adjusted gross income of an individual taxpayer, to
521	521	the extent the deduction is attributable to income reported on schedule C,
522	522	E or F and on line 12, 17 or 18 of the taxpayer's form 1040 federal income
523	523	tax return.
524	524	(xxi) For taxable years beginning after December 31, 2012, and
525	525	ending before January 1, 2017, the amount of any deduction for pension,
526	526	profit sharing, and annuity plans of self-employed individuals under
527	527	section 62(a)(6) of the federal internal revenue code as in effect on January
528	528	1, 2012, and amendments thereto, in determining the federal adjusted gross
529	529	income of an individual taxpayer.
530	530	(xxii) For taxable years beginning after December 31, 2012, and
531	531	ending before January 1, 2017, the amount of any deduction for health
532	532	insurance under section 162(l) of the federal internal revenue code as in
533	533	effect on January 1, 2012, and amendments thereto, in determining the
534	534	federal adjusted gross income of an individual taxpayer.
535	535	(xxiii) For taxable years beginning after December 31, 2012, and
536	536	ending before January 1, 2017, the amount of any deduction for domestic
537	537	production activities under section 199 of the federal internal revenue code
538	538	as in effect on January 1, 2012, and amendments thereto, in determining
539	539	the federal adjusted gross income of an individual taxpayer.
540	540	(xxiv) For taxable years commencing after December 31, 2013, that
541	541	portion of the amount of any expenditure deduction claimed in
542	542	determining federal adjusted gross income for expenses paid for medical
543	543	care of the taxpayer or the taxpayer's spouse or dependents when such
544	544	expenses were paid or incurred for an abortion, or for a health benefit plan,
545	545	as defined in K.S.A. 65-6731, and amendments thereto, for the purchase of
546	546	an optional rider for coverage of abortion in accordance with K.S.A. 40-
547	547	2,190, and amendments thereto, to the extent that such taxes and
548	548	assessments are claimed as an itemized deduction for federal income tax
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592	592	purposes.
593	593	(xxv) For taxable years commencing after December 31, 2013, that
594	594	portion of the amount of any expenditure deduction claimed in
595	595	determining federal adjusted gross income for expenses paid by a taxpayer
596	596	for health care when such expenses were paid or incurred for abortion
597	597	coverage, a health benefit plan, as defined in K.S.A. 65-6731, and
598	598	amendments thereto, when such expenses were paid or incurred for
599	599	abortion coverage or amounts contributed to health savings accounts for
600	600	such taxpayer's employees for the purchase of an optional rider for
601	601	coverage of abortion in accordance with K.S.A. 40-2,190, and
602	602	amendments thereto, to the extent that such taxes and assessments are
603	603	claimed as a deduction for federal income tax purposes.
604	604	(xxvi) For all taxable years beginning after December 31, 2016, the
605	605	amount of any charitable contribution made to the extent the same is
606	606	claimed as the basis for the credit allowed pursuant to K.S.A. 72-4357, and
607	607	amendments thereto, and is also claimed as an itemized deduction for
608	608	federal income tax purposes.
609	609	(xxvii) For all taxable years commencing after December 31, 2020,
610	610	the amount deducted by reason of a carryforward of disallowed business
611	611	interest pursuant to section 163(j) of the federal internal revenue code of
612	612	1986, as in effect on January 1, 2018.
613	613	(xxviii) For all taxable years beginning after December 31, 2021, the
614	614	amount of any contributions to, or earnings from, a first-time home buyer
615	615	savings account if distributions from the account were not used to pay for
616	616	expenses or transactions authorized pursuant to K.S.A. 2022 Supp. 58-
617	617	4904, and amendments thereto, or were not held for the minimum length
618	618	of time required pursuant to K.S.A. 2022 Supp. 58-4904, and amendments
619	619	thereto. Contributions to, or earnings from, such account shall also include
620	620	any amount resulting from the account holder not designating a surviving
621	621	transfer payable on death beneficiary pursuant to K.S.A. 2022 Supp. 58-
622	622	4904(e), and amendments thereto.
623	623	(c) There shall be subtracted from federal adjusted gross income:
624	624	(i) Interest or dividend income on obligations or securities of any
625	625	authority, commission or instrumentality of the United States and its
626	626	possessions less any related expenses directly incurred in the purchase of
627	627	such obligations or securities, to the extent included in federal adjusted
628	628	gross income but exempt from state income taxes under the laws of the
629	629	United States.
630	630	(ii) Any amounts received which are included in federal adjusted
631	631	gross income but which are specifically exempt from Kansas income
632	632	taxation under the laws of the state of Kansas.
633	633	(iii) The portion of any gain or loss from the sale or other disposition
634	634	of property having a higher adjusted basis for Kansas income tax purposes
635	635	1
636	636	2
637	637	3
638	638	4
639	639	5
640	640	6
641	641	7
642	642	8
643	643	9
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668	668	34
669	669	35
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671	671	37
672	672	38
673	673	39
674	674	40
675	675	41
676	676	42
677	677	43 HB 2197 9
678	678	than for federal income tax purposes on the date such property was sold or
679	679	disposed of in a transaction in which gain or loss was recognized for
680	680	purposes of federal income tax that does not exceed such difference in
681	681	basis, but if a gain is considered a long-term capital gain for federal
682	682	income tax purposes, the modification shall be limited to that portion of
683	683	such gain which is included in federal adjusted gross income.
684	684	(iv) The amount necessary to prevent the taxation under this act of
685	685	any annuity or other amount of income or gain which was properly
686	686	included in income or gain and was taxed under the laws of this state for a
687	687	taxable year prior to the effective date of this act, as amended, to the
688	688	taxpayer, or to a decedent by reason of whose death the taxpayer acquired
689	689	the right to receive the income or gain, or to a trust or estate from which
690	690	the taxpayer received the income or gain.
691	691	(v) The amount of any refund or credit for overpayment of taxes on
692	692	or measured by income or fees or payments in lieu of income taxes
693	693	imposed by this state, or any taxing jurisdiction, to the extent included in
694	694	gross income for federal income tax purposes.
695	695	(vi) Accumulation distributions received by a taxpayer as a
696	696	beneficiary of a trust to the extent that the same are included in federal
697	697	adjusted gross income.
698	698	(vii) Amounts received as annuities under the federal civil service
699	699	retirement system from the civil service retirement and disability fund and
700	700	other amounts received as retirement benefits in whatever form which
701	701	were earned for being employed by the federal government or for service
702	702	in the armed forces of the United States.
703	703	(viii) Amounts received by retired railroad employees as a
704	704	supplemental annuity under the provisions of 45 U.S.C. §§ 228b(a) and
705	705	228c(a)(1) et seq.
706	706	(ix) Amounts received by retired employees of a city and by retired
707	707	employees of any board of such city as retirement allowances pursuant to
708	708	K.S.A. 13-14,106, and amendments thereto, or pursuant to any charter
709	709	ordinance exempting a city from the provisions of K.S.A. 13-14,106, and
710	710	amendments thereto.
711	711	(x) For taxable years beginning after December 31, 1976, the amount
712	712	of the federal tentative jobs tax credit disallowance under the provisions of
713	713	26 U.S.C. § 280C. For taxable years ending after December 31, 1978, the
714	714	amount of the targeted jobs tax credit and work incentive credit
715	715	disallowances under 26 U.S.C. § 280C.
716	716	(xi) For taxable years beginning after December 31, 1986, dividend
717	717	income on stock issued by Kansas venture capital, inc.
718	718	(xii) For taxable years beginning after December 31, 1989, amounts
719	719	received by retired employees of a board of public utilities as pension and
720	720	retirement benefits pursuant to K.S.A. 13-1246, 13-1246a and 13-1249,
721	721	1
722	722	2
723	723	3
724	724	4
725	725	5
726	726	6
727	727	7
728	728	8
729	729	9
730	730	10
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757	757	37
758	758	38
759	759	39
760	760	40
761	761	41
762	762	42
763	763	43 HB 2197 10
764	764	and amendments thereto.
765	765	(xiii) For taxable years beginning after December 31, 2004, amounts
766	766	contributed to and the amount of income earned on contributions deposited
767	767	to an individual development account under K.S.A. 74-50,201 et seq., and
768	768	amendments thereto.
769	769	(xiv) For all taxable years commencing after December 31, 1996, that
770	770	portion of any income of a bank organized under the laws of this state or
771	771	any other state, a national banking association organized under the laws of
772	772	the United States, an association organized under the savings and loan
773	773	code of this state or any other state, or a federal savings association
774	774	organized under the laws of the United States, for which an election as an
775	775	S corporation under subchapter S of the federal internal revenue code is in
776	776	effect, which accrues to the taxpayer who is a stockholder of such
777	777	corporation and which is not distributed to the stockholders as dividends of
778	778	the corporation. For taxable years beginning after December 31, 2012, and
779	779	ending before January 1, 2017, the amount of modification under this
780	780	subsection shall exclude the portion of income or loss reported on schedule
781	781	E and included on line 17 of the taxpayer's form 1040 federal individual
782	782	income tax return.
783	783	(xv) For all taxable years beginning after December 31, 2017, the
784	784	cumulative amounts not exceeding $3,000, or $6,000 for a married couple
785	785	filing a joint return, for each designated beneficiary that are contributed to:
786	786	(1) A family postsecondary education savings account established under
787	787	the Kansas postsecondary education savings program or a qualified tuition
788	788	program established and maintained by another state or agency or
789	789	instrumentality thereof pursuant to section 529 of the internal revenue
790	790	code of 1986, as amended, for the purpose of paying the qualified higher
791	791	education expenses of a designated beneficiary; or (2) an achieving a
792	792	better life experience (ABLE) account established under the Kansas ABLE
793	793	savings program or a qualified ABLE program established and maintained
794	794	by another state or agency or instrumentality thereof pursuant to section
795	795	529A of the internal revenue code of 1986, as amended, for the purpose of
796	796	saving private funds to support an individual with a disability. The terms
797	797	and phrases used in this paragraph shall have the meaning respectively
798	798	ascribed thereto by the provisions of K.S.A. 75-643 and 75-652, and
799	799	amendments thereto, and the provisions of such sections are hereby
800	800	incorporated by reference for all purposes thereof.
801	801	(xvi) For all taxable years beginning after December 31, 2004,
802	802	amounts received by taxpayers who are or were members of the armed
803	803	forces of the United States, including service in the Kansas army and air
804	804	national guard, as a recruitment, sign up or retention bonus received by
805	805	such taxpayer as an incentive to join, enlist or remain in the armed services
806	806	of the United States, including service in the Kansas army and air national
807	807	1
808	808	2
809	809	3
810	810	4
811	811	5
812	812	6
813	813	7
814	814	8
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846	846	40
847	847	41
848	848	42
849	849	43 HB 2197 11
850	850	guard, and amounts received for repayment of educational or student loans
851	851	incurred by or obligated to such taxpayer and received by such taxpayer as
852	852	a result of such taxpayer's service in the armed forces of the United States,
853	853	including service in the Kansas army and air national guard.
854	854	(xvii) For all taxable years beginning after December 31, 2004,
855	855	amounts received by taxpayers who are eligible members of the Kansas
856	856	army and air national guard as a reimbursement pursuant to K.S.A. 48-
857	857	281, and amendments thereto, and amounts received for death benefits
858	858	pursuant to K.S.A. 48-282, and amendments thereto, to the extent that
859	859	such death benefits are included in federal adjusted gross income of the
860	860	taxpayer.
861	861	(xviii) For the taxable year beginning after December 31, 2006,
862	862	amounts received as benefits under the federal social security act which
863	863	are included in federal adjusted gross income of a taxpayer with federal
864	864	adjusted gross income of $50,000 or less, whether such taxpayer's filing
865	865	status is single, head of household, married filing separate or married filing
866	866	jointly; and for all taxable years beginning after December 31, 2007,
867	867	amounts received as benefits under the federal social security act which
868	868	are included in federal adjusted gross income of a taxpayer with federal
869	869	adjusted gross income of $75,000 or less, whether such taxpayer's filing
870	870	status is single, head of household, married filing separate or married filing
871	871	jointly.
872	872	(xix) Amounts received by retired employees of Washburn university
873	873	as retirement and pension benefits under the university's retirement plan.
874	874	(xx) For taxable years beginning after December 31, 2012, and
875	875	ending before January 1, 2017, the amount of any: (1) Net profit from
876	876	business as determined under the federal internal revenue code and
877	877	reported from schedule C and on line 12 of the taxpayer's form 1040
878	878	federal individual income tax return; (2) net income, not including
879	879	guaranteed payments as defined in section 707(c) of the federal internal
880	880	revenue code and as reported to the taxpayer from federal schedule K-1,
881	881	(form 1065-B), in box 9, code F or as reported to the taxpayer from federal
882	882	schedule K-1, (form 1065) in box 4, from rental real estate, royalties,
883	883	partnerships, S corporations, estates, trusts, residual interest in real estate
884	884	mortgage investment conduits and net farm rental as determined under the
885	885	federal internal revenue code and reported from schedule E and on line 17
886	886	of the taxpayer's form 1040 federal individual income tax return; and (3)
887	887	net farm profit as determined under the federal internal revenue code and
888	888	reported from schedule F and on line 18 of the taxpayer's form 1040
889	889	federal income tax return; all to the extent included in the taxpayer's
890	890	federal adjusted gross income. For purposes of this subsection, references
891	891	to the federal form 1040 and federal schedule C, schedule E, and schedule
892	892	F, shall be to such form and schedules as they existed for tax year 2011
893	893	1
894	894	2
895	895	3
896	896	4
897	897	5
898	898	6
899	899	7
900	900	8
901	901	9
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932	932	40
933	933	41
934	934	42
935	935	43 HB 2197 12
936	936	and as revised thereafter by the internal revenue service.
937	937	(xxi) For all taxable years beginning after December 31, 2013,
938	938	amounts equal to the unreimbursed travel, lodging and medical
939	939	expenditures directly incurred by a taxpayer while living, or a dependent
940	940	of the taxpayer while living, for the donation of one or more human organs
941	941	of the taxpayer, or a dependent of the taxpayer, to another person for
942	942	human organ transplantation. The expenses may be claimed as a
943	943	subtraction modification provided for in this section to the extent the
944	944	expenses are not already subtracted from the taxpayer's federal adjusted
945	945	gross income. In no circumstances shall the subtraction modification
946	946	provided for in this section for any individual, or a dependent, exceed
947	947	$5,000. As used in this section, "human organ" means all or part of a liver,
948	948	pancreas, kidney, intestine, lung or bone marrow. The provisions of this
949	949	paragraph shall take effect on the day the secretary of revenue certifies to
950	950	the director of the budget that the cost for the department of revenue of
951	951	modifications to the automated tax system for the purpose of
952	952	implementing this paragraph will not exceed $20,000.
953	953	(xxii) For taxable years beginning after December 31, 2012, and
954	954	ending before January 1, 2017, the amount of net gain from the sale of: (1)
955	955	Cattle and horses, regardless of age, held by the taxpayer for draft,
956	956	breeding, dairy or sporting purposes, and held by such taxpayer for 24
957	957	months or more from the date of acquisition; and (2) other livestock,
958	958	regardless of age, held by the taxpayer for draft, breeding, dairy or
959	959	sporting purposes, and held by such taxpayer for 12 months or more from
960	960	the date of acquisition. The subtraction from federal adjusted gross income
961	961	shall be limited to the amount of the additions recognized under the
962	962	provisions of subsection (b)(xix) attributable to the business in which the
963	963	livestock sold had been used. As used in this paragraph, the term
964	964	"livestock" shall not include poultry.
965	965	(xxiii) For all taxable years beginning after December 31, 2012,
966	966	amounts received under either the Overland Park, Kansas police
967	967	department retirement plan or the Overland Park, Kansas fire department
968	968	retirement plan, both as established by the city of Overland Park, pursuant
969	969	to the city's home rule authority.
970	970	(xxiv) For taxable years beginning after December 31, 2013, and
971	971	ending before January 1, 2017, the net gain from the sale from Christmas
972	972	trees grown in Kansas and held by the taxpayer for six years or more.
973	973	(xxv) For all taxable years commencing after December 31, 2020,
974	974	100% of global intangible low-taxed income under section 951A of the
975	975	federal internal revenue code of 1986, before any deductions allowed
976	976	under section 250(a)(1)(B) of such code.
977	977	(xxvi) For all taxable years commencing after December 31, 2020,
978	978	the amount disallowed as a deduction pursuant to section 163(j) of the
979	979	1
980	980	2
981	981	3
982	982	4
983	983	5
984	984	6
985	985	7
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1007	1007	29
1008	1008	30
1009	1009	31
1010	1010	32
1011	1011	33
1012	1012	34
1013	1013	35
1014	1014	36
1015	1015	37
1016	1016	38
1017	1017	39
1018	1018	40
1019	1019	41
1020	1020	42
1021	1021	43 HB 2197 13
1022	1022	federal internal revenue code of 1986, as in effect on January 1, 2018.
1023	1023	(xxvii) For taxable years commencing after December 31, 2020, the
1024	1024	amount disallowed as a deduction pursuant to section 274 of the federal
1025	1025	internal revenue code of 1986 for meal expenditures shall be allowed to
1026	1026	the extent such expense was deductible for determining federal income tax
1027	1027	and was allowed and in effect on December 31, 2017.
1028	1028	(xxviii) For all taxable years beginning after December 31, 2021: (1)
1029	1029	The amount contributed to a first-time home buyer savings account
1030	1030	pursuant to K.S.A. 2022 Supp. 58-4903, and amendments thereto, in an
1031	1031	amount not to exceed $3,000 for an individual or $6,000 for a married
1032	1032	couple filing a joint return; or (2) amounts received as income earned from
1033	1033	assets in a first-time home buyer savings account.
1034	1034	(d) There shall be added to or subtracted from federal adjusted gross
1035	1035	income the taxpayer's share, as beneficiary of an estate or trust, of the
1036	1036	Kansas fiduciary adjustment determined under K.S.A. 79-32,135, and
1037	1037	amendments thereto.
1038	1038	(e) The amount of modifications required to be made under this
1039	1039	section by a partner which relates to items of income, gain, loss, deduction
1040	1040	or credit of a partnership shall be determined under K.S.A. 79-32,131, and
1041	1041	amendments thereto, to the extent that such items affect federal adjusted
1042	1042	gross income of the partner.
1043	1043	(f) No taxpayer shall be assessed penalties and interest from the
1044	1044	underpayment of taxes due to changes to this section that became law on
1045	1045	July 1, 2017, so long as such underpayment is rectified on or before April
1046	1046	17, 2018.
1047	1047	Sec. 5. K.S.A. 2022 Supp. 58-4903, 58-4904, 58-4906 and 79-32,117
1048	1048	are hereby repealed.
1049	1049	Sec. 6. This act shall take effect and be in force from and after its
1050	1050	publication in the statute book.
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