Kansas 2025-2026 Regular Session

Kansas Senate Bill SB277 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	Session of 2025
2	2	SENATE BILL No. 277
3	3	By Committee on Assessment and Taxation
4	4	2-19
5	5	AN ACT concerning income taxation; relating to Kansas adjusted gross
6	6	income; exempting certain qualified tips from state income tax by
7	7	providing a subtraction modification for such tips; amending K.S.A.
8	8	2024 Supp. 79-32,117 and repealing the existing section.
9	9	Be it enacted by the Legislature of the State of Kansas:
10	10	Section 1. K.S.A. 2024 Supp. 79-32,117 is hereby amended to read as
11	11	follows: 79-32,117. (a) The Kansas adjusted gross income of an individual
12	12	means such individual's federal adjusted gross income for the taxable year,
13	13	with the modifications specified in this section.
14	14	(b) There shall be added to federal adjusted gross income:
15	15	(i) Interest income less any related expenses directly incurred in the
16	16	purchase of state or political subdivision obligations, to the extent that the
17	17	same is not included in federal adjusted gross income, on obligations of
18	18	any state or political subdivision thereof, but to the extent that interest
19	19	income on obligations of this state or a political subdivision thereof issued
20	20	prior to January 1, 1988, is specifically exempt from income tax under the
21	21	laws of this state authorizing the issuance of such obligations, it shall be
22	22	excluded from computation of Kansas adjusted gross income whether or
23	23	not included in federal adjusted gross income. Interest income on
24	24	obligations of this state or a political subdivision thereof issued after
25	25	December 31, 1987, shall be excluded from computation of Kansas
26	26	adjusted gross income whether or not included in federal adjusted gross
27	27	income.
28	28	(ii) Taxes on or measured by income or fees or payments in lieu of
29	29	income taxes imposed by this state or any other taxing jurisdiction to the
30	30	extent deductible in determining federal adjusted gross income and not
31	31	credited against federal income tax. This paragraph shall not apply to taxes
32	32	imposed under the provisions of K.S.A. 79-1107 or 79-1108, and
33	33	amendments thereto, for privilege tax year 1995, and all such years
34	34	thereafter.
35	35	(iii) The federal net operating loss deduction, except that the federal
36	36	net operating loss deduction shall not be added to an individual's federal
37	37	adjusted gross income for tax years beginning after December 31, 2016.
38	38	(iv) Federal income tax refunds received by the taxpayer if the
39	39	deduction of the taxes being refunded resulted in a tax benefit for Kansas
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76	76	income tax purposes during a prior taxable year. Such refunds shall be
77	77	included in income in the year actually received regardless of the method
78	78	of accounting used by the taxpayer. For purposes hereof, a tax benefit shall
79	79	be deemed to have resulted if the amount of the tax had been deducted in
80	80	determining income subject to a Kansas income tax for a prior year
81	81	regardless of the rate of taxation applied in such prior year to the Kansas
82	82	taxable income, but only that portion of the refund shall be included as
83	83	bears the same proportion to the total refund received as the federal taxes
84	84	deducted in the year to which such refund is attributable bears to the total
85	85	federal income taxes paid for such year. For purposes of the foregoing
86	86	sentence, federal taxes shall be considered to have been deducted only to
87	87	the extent such deduction does not reduce Kansas taxable income below
88	88	zero.
89	89	(v) The amount of any depreciation deduction or business expense
90	90	deduction claimed on the taxpayer's federal income tax return for any
91	91	capital expenditure in making any building or facility accessible to the
92	92	handicapped, for which expenditure the taxpayer claimed the credit
93	93	allowed by K.S.A. 79-32,177, and amendments thereto.
94	94	(vi) Any amount of designated employee contributions picked up by
95	95	an employer pursuant to K.S.A. 12-5005, 20-2603, 74-4919 and 74-4965,
96	96	and amendments thereto.
97	97	(vii) The amount of any charitable contribution made to the extent the
98	98	same is claimed as the basis for the credit allowed pursuant to K.S.A. 79-
99	99	32,196, and amendments thereto.
100	100	(viii) The amount of any costs incurred for improvements to a swine
101	101	facility, claimed for deduction in determining federal adjusted gross
102	102	income, to the extent the same is claimed as the basis for any credit
103	103	allowed pursuant to K.S.A. 79-32,204, and amendments thereto.
104	104	(ix) The amount of any ad valorem taxes and assessments paid and
105	105	the amount of any costs incurred for habitat management or construction
106	106	and maintenance of improvements on real property, claimed for deduction
107	107	in determining federal adjusted gross income, to the extent the same is
108	108	claimed as the basis for any credit allowed pursuant to K.S.A. 79-32,203,
109	109	and amendments thereto.
110	110	(x) Amounts received as nonqualified withdrawals, as defined by
111	111	K.S.A. 75-643, and amendments thereto, if, at the time of contribution to a
112	112	family postsecondary education savings account, such amounts were
113	113	subtracted from the federal adjusted gross income pursuant to subsection
114	114	(c)(xv) or if such amounts are not already included in the federal adjusted
115	115	gross income.
116	116	(xi) The amount of any contribution made to the same extent the
117	117	same is claimed as the basis for the credit allowed pursuant to K.S.A. 74-
118	118	50,154, and amendments thereto.
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162	162	(xii) For taxable years commencing after December 31, 2004,
163	163	amounts received as withdrawals not in accordance with the provisions of
164	164	K.S.A. 74-50,204, and amendments thereto, if, at the time of contribution
165	165	to an individual development account, such amounts were subtracted from
166	166	the federal adjusted gross income pursuant to subsection (c)(xiii), or if
167	167	such amounts are not already included in the federal adjusted gross
168	168	income.
169	169	(xiii) The amount of any expenditures claimed for deduction in
170	170	determining federal adjusted gross income, to the extent the same is
171	171	claimed as the basis for any credit allowed pursuant to K.S.A. 79-32,217
172	172	through 79-32,220 or 79-32,222, and amendments thereto.
173	173	(xiv) The amount of any amortization deduction claimed in
174	174	determining federal adjusted gross income to the extent the same is
175	175	claimed for deduction pursuant to K.S.A. 79-32,221, and amendments
176	176	thereto.
177	177	(xv) The amount of any expenditures claimed for deduction in
178	178	determining federal adjusted gross income, to the extent the same is
179	179	claimed as the basis for any credit allowed pursuant to K.S.A. 79-32,223
180	180	through 79-32,226, 79-32,228 through 79-32,231, 79-32,233 through 79-
181	181	32,236, 79-32,238 through 79-32,241, 79-32,245 through 79-32,248 or 79-
182	182	32,251 through 79-32,254, and amendments thereto.
183	183	(xvi) The amount of any amortization deduction claimed in
184	184	determining federal adjusted gross income to the extent the same is
185	185	claimed for deduction pursuant to K.S.A. 79-32,227, 79-32,232, 79-
186	186	32,237, 79-32,249, 79-32,250 or 79-32,255, and amendments thereto.
187	187	(xvii) The amount of any amortization deduction claimed in
188	188	determining federal adjusted gross income to the extent the same is
189	189	claimed for deduction pursuant to K.S.A. 79-32,256, and amendments
190	190	thereto.
191	191	(xviii) For taxable years commencing after December 31, 2006, the
192	192	amount of any ad valorem or property taxes and assessments paid to a state
193	193	other than Kansas or local government located in a state other than Kansas
194	194	by a taxpayer who resides in a state other than Kansas, when the law of
195	195	such state does not allow a resident of Kansas who earns income in such
196	196	other state to claim a deduction for ad valorem or property taxes or
197	197	assessments paid to a political subdivision of the state of Kansas in
198	198	determining taxable income for income tax purposes in such other state, to
199	199	the extent that such taxes and assessments are claimed as an itemized
200	200	deduction for federal income tax purposes.
201	201	(xix) For taxable years beginning after December 31, 2012, and
202	202	ending before January 1, 2017, the amount of any: (1) Loss from business
203	203	as determined under the federal internal revenue code and reported from
204	204	schedule C and on line 12 of the taxpayer's form 1040 federal individual
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248	248	income tax return; (2) loss from rental real estate, royalties, partnerships, S
249	249	corporations, except those with wholly owned subsidiaries subject to the
250	250	Kansas privilege tax, estates, trusts, residual interest in real estate
251	251	mortgage investment conduits and net farm rental as determined under the
252	252	federal internal revenue code and reported from schedule E and on line 17
253	253	of the taxpayer's form 1040 federal individual income tax return; and (3)
254	254	farm loss as determined under the federal internal revenue code and
255	255	reported from schedule F and on line 18 of the taxpayer's form 1040
256	256	federal income tax return; all to the extent deducted or subtracted in
257	257	determining the taxpayer's federal adjusted gross income. For purposes of
258	258	this subsection, references to the federal form 1040 and federal schedule
259	259	C, schedule E, and schedule F, shall be to such form and schedules as they
260	260	existed for tax year 2011, and as revised thereafter by the internal revenue
261	261	service.
262	262	(xx) For taxable years beginning after December 31, 2012, and
263	263	ending before January 1, 2017, the amount of any deduction for self-
264	264	employment taxes under section 164(f) of the federal internal revenue
265	265	code as in effect on January 1, 2012, and amendments thereto, in
266	266	determining the federal adjusted gross income of an individual taxpayer, to
267	267	the extent the deduction is attributable to income reported on schedule C,
268	268	E or F and on line 12, 17 or 18 of the taxpayer's form 1040 federal income
269	269	tax return.
270	270	(xxi) For taxable years beginning after December 31, 2012, and
271	271	ending before January 1, 2017, the amount of any deduction for pension,
272	272	profit sharing, and annuity plans of self-employed individuals under
273	273	section 62(a)(6) of the federal internal revenue code as in effect on January
274	274	1, 2012, and amendments thereto, in determining the federal adjusted gross
275	275	income of an individual taxpayer.
276	276	(xxii) For taxable years beginning after December 31, 2012, and
277	277	ending before January 1, 2017, the amount of any deduction for health
278	278	insurance under section 162(l) of the federal internal revenue code as in
279	279	effect on January 1, 2012, and amendments thereto, in determining the
280	280	federal adjusted gross income of an individual taxpayer.
281	281	(xxiii) For taxable years beginning after December 31, 2012, and
282	282	ending before January 1, 2017, the amount of any deduction for domestic
283	283	production activities under section 199 of the federal internal revenue code
284	284	as in effect on January 1, 2012, and amendments thereto, in determining
285	285	the federal adjusted gross income of an individual taxpayer.
286	286	(xxiv) For taxable years commencing after December 31, 2013, that
287	287	portion of the amount of any expenditure deduction claimed in
288	288	determining federal adjusted gross income for expenses paid for medical
289	289	care of the taxpayer or the taxpayer's spouse or dependents when such
290	290	expenses were paid or incurred for an abortion, or for a health benefit plan,
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334	334	as defined in K.S.A. 65-6731, and amendments thereto, for the purchase of
335	335	an optional rider for coverage of abortion in accordance with K.S.A. 40-
336	336	2,190, and amendments thereto, to the extent that such taxes and
337	337	assessments are claimed as an itemized deduction for federal income tax
338	338	purposes.
339	339	(xxv) For taxable years commencing after December 31, 2013, that
340	340	portion of the amount of any expenditure deduction claimed in
341	341	determining federal adjusted gross income for expenses paid by a taxpayer
342	342	for health care when such expenses were paid or incurred for abortion
343	343	coverage, a health benefit plan, as defined in K.S.A. 65-6731, and
344	344	amendments thereto, when such expenses were paid or incurred for
345	345	abortion coverage or amounts contributed to health savings accounts for
346	346	such taxpayer's employees for the purchase of an optional rider for
347	347	coverage of abortion in accordance with K.S.A. 40-2,190, and
348	348	amendments thereto, to the extent that such taxes and assessments are
349	349	claimed as a deduction for federal income tax purposes.
350	350	(xxvi) For all taxable years beginning after December 31, 2016, the
351	351	amount of any charitable contribution made to the extent the same is
352	352	claimed as the basis for the credit allowed pursuant to K.S.A. 72-4357, and
353	353	amendments thereto, and is also claimed as an itemized deduction for
354	354	federal income tax purposes.
355	355	(xxvii) For all taxable years commencing after December 31, 2020,
356	356	the amount of any interest expense paid or accrued in a previous taxable
357	357	year but allowed as a deduction pursuant to section 163 of the federal
358	358	internal revenue code in the current taxable year by reason of the
359	359	carryforward of disallowed business interest pursuant to section 163(j) of
360	360	the federal internal revenue code. For purposes of this paragraph, an
361	361	interest expense is considered paid or accrued only in the first taxable year
362	362	the deduction would have been allowable pursuant to section 163 of the
363	363	federal internal revenue code if the limitation pursuant to section 163(j) of
364	364	the federal internal revenue code did not exist.
365	365	(xxviii) For all taxable years beginning after December 31, 2021, the
366	366	amount of any contributions to, or earnings from, a first-time home buyer
367	367	savings account if distributions from the account were not used to pay for
368	368	expenses or transactions authorized pursuant to K.S.A. 2024 Supp. 58-
369	369	4904, and amendments thereto, or were not held for the minimum length
370	370	of time required pursuant to K.S.A. 2024 Supp. 58-4904, and amendments
371	371	thereto. Contributions to, or earnings from, such account shall also include
372	372	any amount resulting from the account holder not designating a surviving
373	373	payable on death beneficiary pursuant to K.S.A. 2024 Supp. 58-4904(e),
374	374	and amendments thereto.
375	375	(xxix) For all taxable years beginning after December 31, 2024, the
376	376	amount of any contributions to, or earnings from, an adoption savings
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420	420	account if distributions from the account were not used to pay for expenses
421	421	or transactions authorized pursuant to K.S.A. 2024 Supp. 38-2504, and
422	422	amendments thereto, or were not held for the minimum length of time
423	423	required pursuant to K.S.A. 2024 Supp. 38-2504, and amendments thereto.
424	424	Contributions to, or earnings from, such account shall also include any
425	425	amount resulting from the account holder not designating a surviving
426	426	payable on death beneficiary pursuant to K.S.A. 2024 Supp. 38-2504(e),
427	427	and amendments thereto.
428	428	(c) There shall be subtracted from federal adjusted gross income:
429	429	(i) Interest or dividend income on obligations or securities of any
430	430	authority, commission or instrumentality of the United States and its
431	431	possessions less any related expenses directly incurred in the purchase of
432	432	such obligations or securities, to the extent included in federal adjusted
433	433	gross income but exempt from state income taxes under the laws of the
434	434	United States.
435	435	(ii) Any amounts received which are included in federal adjusted
436	436	gross income but which are specifically exempt from Kansas income
437	437	taxation under the laws of the state of Kansas.
438	438	(iii) The portion of any gain or loss from the sale or other disposition
439	439	of property having a higher adjusted basis for Kansas income tax purposes
440	440	than for federal income tax purposes on the date such property was sold or
441	441	disposed of in a transaction in which gain or loss was recognized for
442	442	purposes of federal income tax that does not exceed such difference in
443	443	basis, but if a gain is considered a long-term capital gain for federal
444	444	income tax purposes, the modification shall be limited to that portion of
445	445	such gain which is included in federal adjusted gross income.
446	446	(iv) The amount necessary to prevent the taxation under this act of
447	447	any annuity or other amount of income or gain which was properly
448	448	included in income or gain and was taxed under the laws of this state for a
449	449	taxable year prior to the effective date of this act, as amended, to the
450	450	taxpayer, or to a decedent by reason of whose death the taxpayer acquired
451	451	the right to receive the income or gain, or to a trust or estate from which
452	452	the taxpayer received the income or gain.
453	453	(v) The amount of any refund or credit for overpayment of taxes on
454	454	or measured by income or fees or payments in lieu of income taxes
455	455	imposed by this state, or any taxing jurisdiction, to the extent included in
456	456	gross income for federal income tax purposes.
457	457	(vi) Accumulation distributions received by a taxpayer as a
458	458	beneficiary of a trust to the extent that the same are included in federal
459	459	adjusted gross income.
460	460	(vii) Amounts received as annuities under the federal civil service
461	461	retirement system from the civil service retirement and disability fund and
462	462	other amounts received as retirement benefits in whatever form which
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506	506	were earned for being employed by the federal government or for service
507	507	in the armed forces of the United States.
508	508	(viii) Amounts received by retired railroad employees as a
509	509	supplemental annuity under the provisions of 45 U.S.C. §§ 228b(a) and
510	510	228c(a)(1) et seq.
511	511	(ix) Amounts received by retired employees of a city and by retired
512	512	employees of any board of such city as retirement allowances pursuant to
513	513	K.S.A. 13-14,106, and amendments thereto, or pursuant to any charter
514	514	ordinance exempting a city from the provisions of K.S.A. 13-14,106, and
515	515	amendments thereto.
516	516	(x) (1) For taxable years beginning after December 31, 2021, the
517	517	amount of any federal credit disallowance under the provisions of 26
518	518	U.S.C. § 280C(a).
519	519	(2) For taxable years beginning after December 31, 2019, and ending
520	520	before January 1, 2022, 50% of the amount of the federal employee
521	521	retention credit disallowance under rules similar to the rules of 26 U.S.C. §
522	522	280C(a). The taxpayer shall be required to prove that such taxpayer
523	523	previously filed Kansas income tax returns and paid Kansas income tax on
524	524	the disallowed amount. Notwithstanding any other provision of law to the
525	525	contrary, any claim for refund or amended return relating to this
526	526	subparagraph shall be allowed to be filed on or before April 15, 2025, and
527	527	no claim for refund or amended return shall be allowed or filed after April
528	528	15, 2025.
529	529	(xi) For taxable years beginning after December 31, 1986, dividend
530	530	income on stock issued by Kansas venture capital, inc.
531	531	(xii) For taxable years beginning after December 31, 1989, amounts
532	532	received by retired employees of a board of public utilities as pension and
533	533	retirement benefits pursuant to K.S.A. 13-1246, 13-1246a and 13-1249,
534	534	and amendments thereto.
535	535	(xiii) For taxable years beginning after December 31, 2004, amounts
536	536	contributed to and the amount of income earned on contributions deposited
537	537	to an individual development account under K.S.A. 74-50,201 et seq., and
538	538	amendments thereto.
539	539	(xiv) For all taxable years commencing after December 31, 1996, that
540	540	portion of any income of a bank organized under the laws of this state or
541	541	any other state, a national banking association organized under the laws of
542	542	the United States, an association organized under the savings and loan
543	543	code of this state or any other state, or a federal savings association
544	544	organized under the laws of the United States, for which an election as an
545	545	S corporation under subchapter S of the federal internal revenue code is in
546	546	effect, which accrues to the taxpayer who is a stockholder of such
547	547	corporation and which is not distributed to the stockholders as dividends of
548	548	the corporation. For taxable years beginning after December 31, 2012, and
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592	592	ending before January 1, 2017, the amount of modification under this
593	593	subsection shall exclude the portion of income or loss reported on schedule
594	594	E and included on line 17 of the taxpayer's form 1040 federal individual
595	595	income tax return.
596	596	(xv) The cumulative amounts not exceeding $3,000, or $6,000 for a
597	597	married couple filing a joint return, for each designated beneficiary that
598	598	are contributed to: (1) A family postsecondary education savings account
599	599	established under the Kansas postsecondary education savings program or
600	600	a qualified tuition program established and maintained by another state or
601	601	agency or instrumentality thereof pursuant to section 529 of the internal
602	602	revenue code of 1986, as amended, for the purpose of paying the qualified
603	603	higher education expenses of a designated beneficiary; or (2) an achieving
604	604	a better life experience (ABLE) account established under the Kansas
605	605	ABLE savings program or a qualified ABLE program established and
606	606	maintained by another state or agency or instrumentality thereof pursuant
607	607	to section 529A of the internal revenue code of 1986, as amended, for the
608	608	purpose of saving private funds to support an individual with a disability.
609	609	The terms and phrases used in this paragraph shall have the meaning
610	610	respectively ascribed thereto by the provisions of K.S.A. 75-643 and 75-
611	611	652, and amendments thereto, and the provisions of such sections are
612	612	hereby incorporated by reference for all purposes thereof. For all taxable
613	613	years beginning after December 31, 2022, contributions made to a
614	614	qualified tuition program account or a qualified ABLE program account
615	615	pursuant to this paragraph on and after January 1 but prior to the date
616	616	required for filing a return pursuant to K.S.A. 79-3221, and amendments
617	617	thereto, of the successive taxable year may be elected by the taxpayer to
618	618	apply to the prior taxable year if such election is made at the time of filing
619	619	the return. No contribution shall be used as a modification pursuant to this
620	620	paragraph in more than one taxable year.
621	621	(xvi) For all taxable years beginning after December 31, 2004,
622	622	amounts received by taxpayers who are or were members of the armed
623	623	forces of the United States, including service in the Kansas army and air
624	624	national guard, as a recruitment, sign up or retention bonus received by
625	625	such taxpayer as an incentive to join, enlist or remain in the armed services
626	626	of the United States, including service in the Kansas army and air national
627	627	guard, and amounts received for repayment of educational or student loans
628	628	incurred by or obligated to such taxpayer and received by such taxpayer as
629	629	a result of such taxpayer's service in the armed forces of the United States,
630	630	including service in the Kansas army and air national guard.
631	631	(xvii) For all taxable years beginning after December 31, 2004,
632	632	amounts received by taxpayers who are eligible members of the Kansas
633	633	army and air national guard as a reimbursement pursuant to K.S.A. 48-
634	634	281, and amendments thereto, and amounts received for death benefits
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678	678	pursuant to K.S.A. 48-282, and amendments thereto, to the extent that
679	679	such death benefits are included in federal adjusted gross income of the
680	680	taxpayer.
681	681	(xviii) (A) For all taxable years beginning after December 31, 2007,
682	682	and ending before January 1, 2024, amounts received as benefits under the
683	683	federal social security act which are included in federal adjusted gross
684	684	income of a taxpayer with federal adjusted gross income of $75,000 or
685	685	less, whether such taxpayer's filing status is single, head of household,
686	686	married filing separate or married filing jointly.
687	687	(B) For all taxable years beginning after December 31, 2023, amounts
688	688	received as benefits under the federal social security act that are included
689	689	in federal adjusted gross income of a taxpayer.
690	690	(xix) Amounts received by retired employees of Washburn university
691	691	as retirement and pension benefits under the university's retirement plan.
692	692	(xx) For taxable years beginning after December 31, 2012, and
693	693	ending before January 1, 2017, the amount of any: (1) Net profit from
694	694	business as determined under the federal internal revenue code and
695	695	reported from schedule C and on line 12 of the taxpayer's form 1040
696	696	federal individual income tax return; (2) net income, not including
697	697	guaranteed payments as defined in section 707(c) of the federal internal
698	698	revenue code and as reported to the taxpayer from federal schedule K-1,
699	699	(form 1065-B), in box 9, code F or as reported to the taxpayer from federal
700	700	schedule K-1, (form 1065) in box 4, from rental real estate, royalties,
701	701	partnerships, S corporations, estates, trusts, residual interest in real estate
702	702	mortgage investment conduits and net farm rental as determined under the
703	703	federal internal revenue code and reported from schedule E and on line 17
704	704	of the taxpayer's form 1040 federal individual income tax return; and (3)
705	705	net farm profit as determined under the federal internal revenue code and
706	706	reported from schedule F and on line 18 of the taxpayer's form 1040
707	707	federal income tax return; all to the extent included in the taxpayer's
708	708	federal adjusted gross income. For purposes of this subsection, references
709	709	to the federal form 1040 and federal schedule C, schedule E, and schedule
710	710	F, shall be to such form and schedules as they existed for tax year 2011
711	711	and as revised thereafter by the internal revenue service.
712	712	(xxi) For all taxable years beginning after December 31, 2013,
713	713	amounts equal to the unreimbursed travel, lodging and medical
714	714	expenditures directly incurred by a taxpayer while living, or a dependent
715	715	of the taxpayer while living, for the donation of one or more human organs
716	716	of the taxpayer, or a dependent of the taxpayer, to another person for
717	717	human organ transplantation. The expenses may be claimed as a
718	718	subtraction modification provided for in this section to the extent the
719	719	expenses are not already subtracted from the taxpayer's federal adjusted
720	720	gross income. In no circumstances shall the subtraction modification
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764	764	provided for in this section for any individual, or a dependent, exceed
765	765	$5,000. As used in this section, "human organ" means all or part of a liver,
766	766	pancreas, kidney, intestine, lung or bone marrow. The provisions of this
767	767	paragraph shall take effect on the day the secretary of revenue certifies to
768	768	the director of the budget that the cost for the department of revenue of
769	769	modifications to the automated tax system for the purpose of
770	770	implementing this paragraph will not exceed $20,000.
771	771	(xxii) For taxable years beginning after December 31, 2012, and
772	772	ending before January 1, 2017, the amount of net gain from the sale of: (1)
773	773	Cattle and horses, regardless of age, held by the taxpayer for draft,
774	774	breeding, dairy or sporting purposes, and held by such taxpayer for 24
775	775	months or more from the date of acquisition; and (2) other livestock,
776	776	regardless of age, held by the taxpayer for draft, breeding, dairy or
777	777	sporting purposes, and held by such taxpayer for 12 months or more from
778	778	the date of acquisition. The subtraction from federal adjusted gross income
779	779	shall be limited to the amount of the additions recognized under the
780	780	provisions of subsection (b)(xix) attributable to the business in which the
781	781	livestock sold had been used. As used in this paragraph, the term
782	782	"livestock" shall not include poultry.
783	783	(xxiii) For all taxable years beginning after December 31, 2012,
784	784	amounts received under either the Overland Park, Kansas police
785	785	department retirement plan or the Overland Park, Kansas fire department
786	786	retirement plan, both as established by the city of Overland Park, pursuant
787	787	to the city's home rule authority.
788	788	(xxiv) For taxable years beginning after December 31, 2013, and
789	789	ending before January 1, 2017, the net gain from the sale from Christmas
790	790	trees grown in Kansas and held by the taxpayer for six years or more.
791	791	(xxv) For all taxable years commencing after December 31, 2020,
792	792	100% of global intangible low-taxed income under section 951A of the
793	793	federal internal revenue code of 1986, before any deductions allowed
794	794	under section 250(a)(1)(B) of such code.
795	795	(xxvi) (1) For all taxable years commencing after December 31,
796	796	2020, the amount of any interest expense paid or accrued in the current
797	797	taxable year and disallowed as a deduction pursuant to section 163(j) of
798	798	the federal internal revenue code.
799	799	(2) For purposes of this paragraph, an interest expense is considered
800	800	paid or accrued only in the first taxable year the deduction would have
801	801	been allowable pursuant to section 163 of the federal internal revenue code
802	802	if the limitation pursuant to section 163(j) of the federal internal revenue
803	803	code did not exist.
804	804	(3) For tax year 2021, an amount equal to the sum of any interest
805	805	expenses paid or accrued in tax years 2018, 2019 and 2020 less the sum of
806	806	amounts allowed as a deduction pursuant to section 163 of the federal
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849	849	43 SB 277 11
850	850	internal revenue code in tax years 2018, 2019 and 2020.
851	851	(xxvii) For taxable years commencing after December 31, 2020, the
852	852	amount disallowed as a deduction pursuant to section 274 of the federal
853	853	internal revenue code of 1986 for meal expenditures shall be allowed to
854	854	the extent such expense was deductible for determining federal income tax
855	855	and was allowed and in effect on December 31, 2017.
856	856	(xxviii) For all taxable years beginning after December 31, 2021: (1)
857	857	The amount contributed to a first-time home buyer savings account
858	858	pursuant to K.S.A. 2024 Supp. 58-4903, and amendments thereto, in an
859	859	amount not to exceed $3,000 for an individual or $6,000 for a married
860	860	couple filing a joint return; or (2) amounts received as income earned from
861	861	assets in a first-time home buyer savings account. For all taxable years
862	862	beginning after December 31, 2022, contributions made to a first-time
863	863	home buyer savings account pursuant to subparagraph (1) on and after
864	864	January 1 but prior to the date required for filing a return pursuant to
865	865	K.S.A. 79-3221, and amendments thereto, of the successive taxable year
866	866	may be elected by the taxpayer to apply to the prior taxable year if such
867	867	election is made at the time of filing the return. No contribution shall be
868	868	used as a modification pursuant to subparagraph (1) in more than one
869	869	taxable year.
870	870	(xxix) For taxable years beginning after December 31, 2017, for an
871	871	individual taxpayer who carried back federal net operating losses arising in
872	872	a taxable year beginning after December 31, 2017, and before January 1,
873	873	2021, pursuant to section 172(b)(1) of the federal internal revenue code as
874	874	amended by the coronavirus aid, relief, and economic security act
875	875	(CARES act), the amount of such federal net operating loss carryback for
876	876	each applicable year. If the amount of such federal net operating loss
877	877	carryback exceeds the taxpayer's Kansas adjusted gross income for such
878	878	taxable year, the amount thereof that exceeds such Kansas adjusted gross
879	879	income may be carried forward as a subtraction modification in the
880	880	following taxable year or years until the total amount of such federal net
881	881	operating loss carryback has been deducted, except that no such unused
882	882	amount shall be carried forward for deduction as a subtraction
883	883	modification after the 20
884	884	th
885	885	taxable year following the taxable year of the
886	886	net operating loss. Notwithstanding any other provision of law to the
887	887	contrary, an extension of time shall be allowed for a claim for refund or
888	888	amended return for tax years 2018, 2019 or 2020 limited to the application
889	889	of the provisions of this paragraph and such claim for refund or amended
890	890	return must be filed on or before April 15, 2025.
891	891	(xxx) For all taxable years beginning after December 31, 2024: (1)
892	892	The amount contributed to an adoption savings account pursuant to K.S.A.
893	893	2024 Supp. 38-2503, and amendments thereto, in an amount not to exceed
894	894	$6,000 for an individual or $12,000 for a married couple filing a joint
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938	938	return; or (2) amounts received as income earned from assets in an
939	939	adoption savings account.
940	940	(xxxi) (1) For all taxable years beginning after December 31, 2025,
941	941	an amount equal to the qualified tips received during the taxable year that
942	942	are included on statements furnished to the employer pursuant to section
943	943	6053(a) of the federal internal revenue code and are included in federal
944	944	adjusted gross income of the taxpayer. The amount of the subtraction
945	945	modification pursuant to this paragraph for the taxable year shall not
946	946	exceed $25,000 for an individual or $25,000 for each spouse who receives
947	947	such qualified tips and files a married filing joint return.
948	948	(2) As used in this paragraph:
949	949	(A) "Cash tip" includes, but is not limited to, tips received from
950	950	customers, tips received from other employees under any tip-sharing
951	951	arrangement and charged tips, such as credit and debit card charged tips,
952	952	distributed to the employee by the employer; and
953	953	(B) "qualified tip" means any cash tip received by an individual in
954	954	the course of such individual's employment in an occupation that
955	955	traditionally and customarily received tips on or before December 31,
956	956	2024, as provided by the secretary of revenue. "Qualified tip" shall not
957	957	include any amount received by an individual in the course of employment
958	958	by an employer if such individual had, for the preceding taxable year,
959	959	compensation, within the meaning of section 414(q)(4) of the federal
960	960	internal revenue code, from such employer in excess of the amount in
961	961	effect under section 414(q)(1)(B)(i) of the federal internal revenue code.
962	962	(3) Not later than 90 days after the date of the enactment of this
963	963	paragraph, the secretary of revenue shall publish a list of occupations that
964	964	traditionally and customarily received tips on or before December 31,
965	965	2024, for purposes of this paragraph.
966	966	(d) There shall be added to or subtracted from federal adjusted gross
967	967	income the taxpayer's share, as beneficiary of an estate or trust, of the
968	968	Kansas fiduciary adjustment determined under K.S.A. 79-32,135, and
969	969	amendments thereto.
970	970	(e) The amount of modifications required to be made under this
971	971	section by a partner which relates to items of income, gain, loss, deduction
972	972	or credit of a partnership shall be determined under K.S.A. 79-32,131, and
973	973	amendments thereto, to the extent that such items affect federal adjusted
974	974	gross income of the partner.
975	975	Sec. 2. K.S.A. 2024 Supp. 79-32,117 is hereby repealed.
976	976	Sec. 3. This act shall take effect and be in force from and after its
977	977	publication in the statute book.
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