As Amended by Senate Committee
Session of 2025
SENATE BILL No. 75
By Committee on Education
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AN ACT concerning income taxation; relating to tax credits for education
expenses; providing an education opportunity tax credit for taxpayers
with eligible dependent children not enrolled in public school;
amending K.S.A. 2024 Supp. 79-32,117 and repealing the existing
section.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. (a) For tax year 2025 and all tax years thereafter,
there shall be allowed as a credit against the tax liability of a resident
individual imposed under the Kansas income tax act an education
opportunity tax credit. For each dependent child eligible to enroll in
kindergarten or any of the grades one through 12 in a Kansas public school
but who was not so enrolled, the education opportunity tax credit shall be
as follows in an amount equal to the expenditures directly attributable to
the tuition and related costs, including the cost of books, materials and
equipment, required for attendance at a private school, except that the
tax credit shall not exceed:
(1) $8,000 for each dependent child enrolled full time during the tax
year in a private school accredited by the state board of education or a
national or regional accrediting agency that is recognized by the state
board for the purpose of satisfying the teaching performance assessment
for professional licensure or is working in good faith toward such
accreditation; or
(2) $4,000 for each dependent child enrolled full time during the tax
year in a nonaccredited private school.
(b) (1) For tax year 2025, the total amount of credits allowed under
this section shall not exceed $125,000,000. For tax year 2026, and all tax
years thereafter, the maximum total amount of credits allowed under this
section shall be the same amount as the prior tax year, except that for any
tax year in which the annual tax credit amount that was used for the prior
tax year was equal to or greater than 90% of the maximum total amount of
credits allowed for such prior tax year, the maximum total amount of
credits shall increase by 25%. The department of revenue shall publish on
its website information identifying such increases in the maximum total
amount of tax credits.
(2) If the number of applications exceeds the available credit, the
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secretary shall give priority to taxpayers who have previously received a
tax credit under this section.
(c) If the amount of the tax credit allowed by this section exceeds the
taxpayer's income tax liability imposed under the Kansas income tax act
for such tax year, the excess amount shall be refunded to the taxpayer.
(d) A taxpayer shall not receive the education opportunity tax credit if
such taxpayer fails to provide a valid social security number issued by the
social security administration for each dependent child of the taxpayer for
whom the taxpayer is seeking such tax credit.
(e) A taxpayer shall not be eligible to claim the education opportunity
tax credit for a dependent child for a tax year in which such dependent
child received a scholarship pursuant to the tax credit for low income
students scholarship program act, K.S.A. 72-4351 et seq., and amendments
thereto.
(f) The department of revenue shall provide an eligible taxpayer the
opportunity to either claim and receive the education opportunity tax credit
in advance during the tax year or to claim the tax credit on their annual
income tax forms. If the taxpayer chooses to claim the tax credit in
advance during the tax year, the taxpayer may file an application at any
time during the tax year on a form prescribed by the department of
revenue.
(g) (1) The department of revenue may consult with the state
department of education only for the purpose of determining whether or
not a dependent child of a taxpayer claiming an education opportunity tax
credit is enrolled in a public school, as defined in K.S.A. 72-4352, and
amendments thereto, during the tax year for which the credit is claimed.
(2) By making a claim for the education opportunity tax credit, the
taxpayer acknowledges that the department of revenue may consult with
and receive information from the state department of education regarding
the public school enrollment status of any dependent child for whom the
tax credit is being claimed.
(h)(g) On or before January 15 of each year, the department of
revenue shall prepare and submit to the legislature a report on the
education opportunity tax credit for the second preceding tax year. Such
report shall include, but not be limited to, the total amount of credits
claimed and any information on known fraudulent claims for the credit.
(i)(h) Any person who intentionally files a false claim for the
education opportunity tax credit or receives the education opportunity tax
credit but does not send such person's dependent child to a private school
as described in subsection (a)(1) or (a)(2) shall be subject to a civil penalty
in an amount computed in the manner prescribed in K.S.A. 79-3228(e),
and amendments thereto.
(j)(i) (1) In any legal proceeding challenging the application of this
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section to a taxpayer receiving the tax credit, the state bears the burden of
establishing that the law is necessary and does not impose any undue
burden on the on the taxpayer.
(2) No liability shall arise on the part of the department, the state or
any public school or school district based on the award of or use of an
education opportunity tax credit pursuant to this section.
(3) If any part of this section is challenged in a state court as violating
either the state or federal constitutions, taxpayers claiming the education
opportunity tax credit shall be permitted to intervene as of right in such
lawsuit for the purposes of defending the education opportunity tax credit's
constitutionality. However, for the purposes of judicial administration, a
court may require that all taxpayers file a joint brief, so long as they are
not required to join any brief filed on behalf of any named state defendant.
(4) If any provision of this section, or the application thereof to any
person or circumstances, is held invalid, such invalidity shall not affect
other provisions or applications of this section which can be given effect
without the invalid provision or application, and to this end the provisions
of this section are declared to be severable.
(k)(j) This section shall be a part of and supplemental to the Kansas
income tax act.
Sec. 2. K.S.A. 2024 Supp. 79-32,117 is hereby amended to read as
follows: 79-32,117. (a) The Kansas adjusted gross income of an individual
means such individual's federal adjusted gross income for the taxable year,
with the modifications specified in this section.
(b) There shall be added to federal adjusted gross income:
(i) Interest income less any related expenses directly incurred in the
purchase of state or political subdivision obligations, to the extent that the
same is not included in federal adjusted gross income, on obligations of
any state or political subdivision thereof, but to the extent that interest
income on obligations of this state or a political subdivision thereof issued
prior to January 1, 1988, is specifically exempt from income tax under the
laws of this state authorizing the issuance of such obligations, it shall be
excluded from computation of Kansas adjusted gross income whether or
not included in federal adjusted gross income. Interest income on
obligations of this state or a political subdivision thereof issued after
December 31, 1987, shall be excluded from computation of Kansas
adjusted gross income whether or not included in federal adjusted gross
income.
(ii) Taxes on or measured by income or fees or payments in lieu of
income taxes imposed by this state or any other taxing jurisdiction to the
extent deductible in determining federal adjusted gross income and not
credited against federal income tax. This paragraph shall not apply to taxes
imposed under the provisions of K.S.A. 79-1107 or 79-1108, and
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amendments thereto, for privilege tax year 1995, and all such years
thereafter.
(iii) The federal net operating loss deduction, except that the federal
net operating loss deduction shall not be added to an individual's federal
adjusted gross income for tax years beginning after December 31, 2016.
(iv) Federal income tax refunds received by the taxpayer if the
deduction of the taxes being refunded resulted in a tax benefit for Kansas
income tax purposes during a prior taxable year. Such refunds shall be
included in income in the year actually received regardless of the method
of accounting used by the taxpayer. For purposes hereof, a tax benefit shall
be deemed to have resulted if the amount of the tax had been deducted in
determining income subject to a Kansas income tax for a prior year
regardless of the rate of taxation applied in such prior year to the Kansas
taxable income, but only that portion of the refund shall be included as
bears the same proportion to the total refund received as the federal taxes
deducted in the year to which such refund is attributable bears to the total
federal income taxes paid for such year. For purposes of the foregoing
sentence, federal taxes shall be considered to have been deducted only to
the extent such deduction does not reduce Kansas taxable income below
zero.
(v) The amount of any depreciation deduction or business expense
deduction claimed on the taxpayer's federal income tax return for any
capital expenditure in making any building or facility accessible to the
handicapped, for which expenditure the taxpayer claimed the credit
allowed by K.S.A. 79-32,177, and amendments thereto.
(vi) Any amount of designated employee contributions picked up by
an employer pursuant to K.S.A. 12-5005, 20-2603, 74-4919 and 74-4965,
and amendments thereto.
(vii) The amount of any charitable contribution made to the extent the
same is claimed as the basis for the credit allowed pursuant to K.S.A. 79-
32,196, and amendments thereto.
(viii) The amount of any costs incurred for improvements to a swine
facility, claimed for deduction in determining federal adjusted gross
income, to the extent the same is claimed as the basis for any credit
allowed pursuant to K.S.A. 79-32,204, and amendments thereto.
(ix) The amount of any ad valorem taxes and assessments paid and
the amount of any costs incurred for habitat management or construction
and maintenance of improvements on real property, claimed for deduction
in determining federal adjusted gross income, to the extent the same is
claimed as the basis for any credit allowed pursuant to K.S.A. 79-32,203,
and amendments thereto.
(x) Amounts received as nonqualified withdrawals, as defined by
K.S.A. 75-643, and amendments thereto, if, at the time of contribution to a
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family postsecondary education savings account, such amounts were
subtracted from the federal adjusted gross income pursuant to subsection
(c)(xv) or if such amounts are not already included in the federal adjusted
gross income.
(xi) The amount of any contribution made to the same extent the
same is claimed as the basis for the credit allowed pursuant to K.S.A. 74-
50,154, and amendments thereto.
(xii) For taxable years commencing after December 31, 2004,
amounts received as withdrawals not in accordance with the provisions of
K.S.A. 74-50,204, and amendments thereto, if, at the time of contribution
to an individual development account, such amounts were subtracted from
the federal adjusted gross income pursuant to subsection (c)(xiii), or if
such amounts are not already included in the federal adjusted gross
income.
(xiii) The amount of any expenditures claimed for deduction in
determining federal adjusted gross income, to the extent the same is
claimed as the basis for any credit allowed pursuant to K.S.A. 79-32,217
through 79-32,220 or 79-32,222, and amendments thereto.
(xiv) The amount of any amortization deduction claimed in
determining federal adjusted gross income to the extent the same is
claimed for deduction pursuant to K.S.A. 79-32,221, and amendments
thereto.
(xv) The amount of any expenditures claimed for deduction in
determining federal adjusted gross income, to the extent the same is
claimed as the basis for any credit allowed pursuant to K.S.A. 79-32,223
through 79-32,226, 79-32,228 through 79-32,231, 79-32,233 through 79-
32,236, 79-32,238 through 79-32,241, 79-32,245 through 79-32,248 or 79-
32,251 through 79-32,254, and amendments thereto.
(xvi) The amount of any amortization deduction claimed in
determining federal adjusted gross income to the extent the same is
claimed for deduction pursuant to K.S.A. 79-32,227, 79-32,232, 79-
32,237, 79-32,249, 79-32,250 or 79-32,255, and amendments thereto.
(xvii) The amount of any amortization deduction claimed in
determining federal adjusted gross income to the extent the same is
claimed for deduction pursuant to K.S.A. 79-32,256, and amendments
thereto.
(xviii) For taxable years commencing after December 31, 2006, the
amount of any ad valorem or property taxes and assessments paid to a state
other than Kansas or local government located in a state other than Kansas
by a taxpayer who resides in a state other than Kansas, when the law of
such state does not allow a resident of Kansas who earns income in such
other state to claim a deduction for ad valorem or property taxes or
assessments paid to a political subdivision of the state of Kansas in
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determining taxable income for income tax purposes in such other state, to
the extent that such taxes and assessments are claimed as an itemized
deduction for federal income tax purposes.
(xix) For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of any: (1) Loss from business
as determined under the federal internal revenue code and reported from
schedule C and on line 12 of the taxpayer's form 1040 federal individual
income tax return; (2) loss from rental real estate, royalties, partnerships, S
corporations, except those with wholly owned subsidiaries subject to the
Kansas privilege tax, estates, trusts, residual interest in real estate
mortgage investment conduits and net farm rental as determined under the
federal internal revenue code and reported from schedule E and on line 17
of the taxpayer's form 1040 federal individual income tax return; and (3)
farm loss as determined under the federal internal revenue code and
reported from schedule F and on line 18 of the taxpayer's form 1040
federal income tax return; all to the extent deducted or subtracted in
determining the taxpayer's federal adjusted gross income. For purposes of
this subsection, references to the federal form 1040 and federal schedule
C, schedule E, and schedule F, shall be to such form and schedules as they
existed for tax year 2011, and as revised thereafter by the internal revenue
service.
(xx) For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of any deduction for self-
employment taxes under section 164(f) of the federal internal revenue
code as in effect on January 1, 2012, and amendments thereto, in
determining the federal adjusted gross income of an individual taxpayer, to
the extent the deduction is attributable to income reported on schedule C,
E or F and on line 12, 17 or 18 of the taxpayer's form 1040 federal income
tax return.
(xxi) For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of any deduction for pension,
profit sharing, and annuity plans of self-employed individuals under
section 62(a)(6) of the federal internal revenue code as in effect on January
1, 2012, and amendments thereto, in determining the federal adjusted gross
income of an individual taxpayer.
(xxii) For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of any deduction for health
insurance under section 162(l) of the federal internal revenue code as in
effect on January 1, 2012, and amendments thereto, in determining the
federal adjusted gross income of an individual taxpayer.
(xxiii) For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of any deduction for domestic
production activities under section 199 of the federal internal revenue code
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as in effect on January 1, 2012, and amendments thereto, in determining
the federal adjusted gross income of an individual taxpayer.
(xxiv) For taxable years commencing after December 31, 2013, that
portion of the amount of any expenditure deduction claimed in
determining federal adjusted gross income for expenses paid for medical
care of the taxpayer or the taxpayer's spouse or dependents when such
expenses were paid or incurred for an abortion, or for a health benefit plan,
as defined in K.S.A. 65-6731, and amendments thereto, for the purchase of
an optional rider for coverage of abortion in accordance with K.S.A. 40-
2,190, and amendments thereto, to the extent that such taxes and
assessments are claimed as an itemized deduction for federal income tax
purposes.
(xxv) For taxable years commencing after December 31, 2013, that
portion of the amount of any expenditure deduction claimed in
determining federal adjusted gross income for expenses paid by a taxpayer
for health care when such expenses were paid or incurred for abortion
coverage, a health benefit plan, as defined in K.S.A. 65-6731, and
amendments thereto, when such expenses were paid or incurred for
abortion coverage or amounts contributed to health savings accounts for
such taxpayer's employees for the purchase of an optional rider for
coverage of abortion in accordance with K.S.A. 40-2,190, and
amendments thereto, to the extent that such taxes and assessments are
claimed as a deduction for federal income tax purposes.
(xxvi) For all taxable years beginning after December 31, 2016, the
amount of any charitable contribution made to the extent the same is
claimed as the basis for the credit allowed pursuant to K.S.A. 72-4357, and
amendments thereto, and is also claimed as an itemized deduction for
federal income tax purposes.
(xxvii) For all taxable years commencing after December 31, 2020,
the amount of any interest expense paid or accrued in a previous taxable
year but allowed as a deduction pursuant to section 163 of the federal
internal revenue code in the current taxable year by reason of the
carryforward of disallowed business interest pursuant to section 163(j) of
the federal internal revenue code. For purposes of this paragraph, an
interest expense is considered paid or accrued only in the first taxable year
the deduction would have been allowable pursuant to section 163 of the
federal internal revenue code if the limitation pursuant to section 163(j) of
the federal internal revenue code did not exist.
(xxviii) For all taxable years beginning after December 31, 2021, the
amount of any contributions to, or earnings from, a first-time home buyer
savings account if distributions from the account were not used to pay for
expenses or transactions authorized pursuant to K.S.A. 2024 Supp. 58-
4904, and amendments thereto, or were not held for the minimum length
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of time required pursuant to K.S.A. 2024 Supp. 58-4904, and amendments
thereto. Contributions to, or earnings from, such account shall also include
any amount resulting from the account holder not designating a surviving
payable on death beneficiary pursuant to K.S.A. 2024 Supp. 58-4904(e),
and amendments thereto.
(xxix) For all taxable years beginning after December 31, 2024, the
amount of any contributions to, or earnings from, an adoption savings
account if distributions from the account were not used to pay for expenses
or transactions authorized pursuant to K.S.A. 2024 Supp. 38-2504, and
amendments thereto, or were not held for the minimum length of time
required pursuant to K.S.A. 2024 Supp. 38-2504, and amendments thereto.
Contributions to, or earnings from, such account shall also include any
amount resulting from the account holder not designating a surviving
payable on death beneficiary pursuant to K.S.A. 2024 Supp. 38-2504(e),
and amendments thereto.
(c) There shall be subtracted from federal adjusted gross income:
(i) Interest or dividend income on obligations or securities of any
authority, commission or instrumentality of the United States and its
possessions less any related expenses directly incurred in the purchase of
such obligations or securities, to the extent included in federal adjusted
gross income but exempt from state income taxes under the laws of the
United States.
(ii) Any amounts received which are included in federal adjusted
gross income but which are specifically exempt from Kansas income
taxation under the laws of the state of Kansas.
(iii) The portion of any gain or loss from the sale or other disposition
of property having a higher adjusted basis for Kansas income tax purposes
than for federal income tax purposes on the date such property was sold or
disposed of in a transaction in which gain or loss was recognized for
purposes of federal income tax that does not exceed such difference in
basis, but if a gain is considered a long-term capital gain for federal
income tax purposes, the modification shall be limited to that portion of
such gain which is included in federal adjusted gross income.
(iv) The amount necessary to prevent the taxation under this act of
any annuity or other amount of income or gain which was properly
included in income or gain and was taxed under the laws of this state for a
taxable year prior to the effective date of this act, as amended, to the
taxpayer, or to a decedent by reason of whose death the taxpayer acquired
the right to receive the income or gain, or to a trust or estate from which
the taxpayer received the income or gain.
(v) The amount of any refund or credit for overpayment of taxes on
or measured by income or fees or payments in lieu of income taxes
imposed by this state, or any taxing jurisdiction, to the extent included in
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gross income for federal income tax purposes.
(vi) Accumulation distributions received by a taxpayer as a
beneficiary of a trust to the extent that the same are included in federal
adjusted gross income.
(vii) Amounts received as annuities under the federal civil service
retirement system from the civil service retirement and disability fund and
other amounts received as retirement benefits in whatever form which
were earned for being employed by the federal government or for service
in the armed forces of the United States.
(viii) Amounts received by retired railroad employees as a
supplemental annuity under the provisions of 45 U.S.C. §§ 228b(a) and
228c(a)(1) et seq.
(ix) Amounts received by retired employees of a city and by retired
employees of any board of such city as retirement allowances pursuant to
K.S.A. 13-14,106, and amendments thereto, or pursuant to any charter
ordinance exempting a city from the provisions of K.S.A. 13-14,106, and
amendments thereto.
(x) (1) For taxable years beginning after December 31, 2021, the
amount of any federal credit disallowance under the provisions of 26
U.S.C. § 280C(a).
(2) For taxable years beginning after December 31, 2019, and ending
before January 1, 2022, 50% of the amount of the federal employee
retention credit disallowance under rules similar to the rules of 26 U.S.C. §
280C(a). The taxpayer shall be required to prove that such taxpayer
previously filed Kansas income tax returns and paid Kansas income tax on
the disallowed amount. Notwithstanding any other provision of law to the
contrary, any claim for refund or amended return relating to this
subparagraph shall be allowed to be filed on or before April 15, 2025, and
no claim for refund or amended return shall be allowed or filed after April
15, 2025.
(xi) For taxable years beginning after December 31, 1986, dividend
income on stock issued by Kansas venture capital, inc.
(xii) For taxable years beginning after December 31, 1989, amounts
received by retired employees of a board of public utilities as pension and
retirement benefits pursuant to K.S.A. 13-1246, 13-1246a and 13-1249,
and amendments thereto.
(xiii) For taxable years beginning after December 31, 2004, amounts
contributed to and the amount of income earned on contributions deposited
to an individual development account under K.S.A. 74-50,201 et seq., and
amendments thereto.
(xiv) For all taxable years commencing after December 31, 1996, that
portion of any income of a bank organized under the laws of this state or
any other state, a national banking association organized under the laws of
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the United States, an association organized under the savings and loan
code of this state or any other state, or a federal savings association
organized under the laws of the United States, for which an election as an
S corporation under subchapter S of the federal internal revenue code is in
effect, which accrues to the taxpayer who is a stockholder of such
corporation and which is not distributed to the stockholders as dividends of
the corporation. For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of modification under this
subsection shall exclude the portion of income or loss reported on schedule
E and included on line 17 of the taxpayer's form 1040 federal individual
income tax return.
(xv) The cumulative amounts not exceeding $3,000, or $6,000 for a
married couple filing a joint return, for each designated beneficiary that
are contributed to: (1) A family postsecondary education savings account
established under the Kansas postsecondary education savings program or
a qualified tuition program established and maintained by another state or
agency or instrumentality thereof pursuant to section 529 of the internal
revenue code of 1986, as amended, for the purpose of paying the qualified
higher education expenses of a designated beneficiary; or (2) an achieving
a better life experience (ABLE) account established under the Kansas
ABLE savings program or a qualified ABLE program established and
maintained by another state or agency or instrumentality thereof pursuant
to section 529A of the internal revenue code of 1986, as amended, for the
purpose of saving private funds to support an individual with a disability.
The terms and phrases used in this paragraph shall have the meaning
respectively ascribed thereto by the provisions of K.S.A. 75-643 and 75-
652, and amendments thereto, and the provisions of such sections are
hereby incorporated by reference for all purposes thereof. For all taxable
years beginning after December 31, 2022, contributions made to a
qualified tuition program account or a qualified ABLE program account
pursuant to this paragraph on and after January 1 but prior to the date
required for filing a return pursuant to K.S.A. 79-3221, and amendments
thereto, of the successive taxable year may be elected by the taxpayer to
apply to the prior taxable year if such election is made at the time of filing
the return. No contribution shall be used as a modification pursuant to this
paragraph in more than one taxable year.
(xvi) For all taxable years beginning after December 31, 2004,
amounts received by taxpayers who are or were members of the armed
forces of the United States, including service in the Kansas army and air
national guard, as a recruitment, sign up or retention bonus received by
such taxpayer as an incentive to join, enlist or remain in the armed services
of the United States, including service in the Kansas army and air national
guard, and amounts received for repayment of educational or student loans
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incurred by or obligated to such taxpayer and received by such taxpayer as
a result of such taxpayer's service in the armed forces of the United States,
including service in the Kansas army and air national guard.
(xvii) For all taxable years beginning after December 31, 2004,
amounts received by taxpayers who are eligible members of the Kansas
army and air national guard as a reimbursement pursuant to K.S.A. 48-
281, and amendments thereto, and amounts received for death benefits
pursuant to K.S.A. 48-282, and amendments thereto, to the extent that
such death benefits are included in federal adjusted gross income of the
taxpayer.
(xviii) (A) For all taxable years beginning after December 31, 2007,
and ending before January 1, 2024, amounts received as benefits under the
federal social security act which are included in federal adjusted gross
income of a taxpayer with federal adjusted gross income of $75,000 or
less, whether such taxpayer's filing status is single, head of household,
married filing separate or married filing jointly.
(B) For all taxable years beginning after December 31, 2023, amounts
received as benefits under the federal social security act that are included
in federal adjusted gross income of a taxpayer.
(xix) Amounts received by retired employees of Washburn university
as retirement and pension benefits under the university's retirement plan.
(xx) For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of any: (1) Net profit from
business as determined under the federal internal revenue code and
reported from schedule C and on line 12 of the taxpayer's form 1040
federal individual income tax return; (2) net income, not including
guaranteed payments as defined in section 707(c) of the federal internal
revenue code and as reported to the taxpayer from federal schedule K-1,
(form 1065-B), in box 9, code F or as reported to the taxpayer from federal
schedule K-1, (form 1065) in box 4, from rental real estate, royalties,
partnerships, S corporations, estates, trusts, residual interest in real estate
mortgage investment conduits and net farm rental as determined under the
federal internal revenue code and reported from schedule E and on line 17
of the taxpayer's form 1040 federal individual income tax return; and (3)
net farm profit as determined under the federal internal revenue code and
reported from schedule F and on line 18 of the taxpayer's form 1040
federal income tax return; all to the extent included in the taxpayer's
federal adjusted gross income. For purposes of this subsection, references
to the federal form 1040 and federal schedule C, schedule E, and schedule
F, shall be to such form and schedules as they existed for tax year 2011
and as revised thereafter by the internal revenue service.
(xxi) For all taxable years beginning after December 31, 2013,
amounts equal to the unreimbursed travel, lodging and medical
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expenditures directly incurred by a taxpayer while living, or a dependent
of the taxpayer while living, for the donation of one or more human organs
of the taxpayer, or a dependent of the taxpayer, to another person for
human organ transplantation. The expenses may be claimed as a
subtraction modification provided for in this section to the extent the
expenses are not already subtracted from the taxpayer's federal adjusted
gross income. In no circumstances shall the subtraction modification
provided for in this section for any individual, or a dependent, exceed
$5,000. As used in this section, "human organ" means all or part of a liver,
pancreas, kidney, intestine, lung or bone marrow. The provisions of this
paragraph shall take effect on the day the secretary of revenue certifies to
the director of the budget that the cost for the department of revenue of
modifications to the automated tax system for the purpose of
implementing this paragraph will not exceed $20,000.
(xxii) For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of net gain from the sale of: (1)
Cattle and horses, regardless of age, held by the taxpayer for draft,
breeding, dairy or sporting purposes, and held by such taxpayer for 24
months or more from the date of acquisition; and (2) other livestock,
regardless of age, held by the taxpayer for draft, breeding, dairy or
sporting purposes, and held by such taxpayer for 12 months or more from
the date of acquisition. The subtraction from federal adjusted gross income
shall be limited to the amount of the additions recognized under the
provisions of subsection (b)(xix) attributable to the business in which the
livestock sold had been used. As used in this paragraph, the term
"livestock" shall not include poultry.
(xxiii) For all taxable years beginning after December 31, 2012,
amounts received under either the Overland Park, Kansas police
department retirement plan or the Overland Park, Kansas fire department
retirement plan, both as established by the city of Overland Park, pursuant
to the city's home rule authority.
(xxiv) For taxable years beginning after December 31, 2013, and
ending before January 1, 2017, the net gain from the sale from Christmas
trees grown in Kansas and held by the taxpayer for six years or more.
(xxv) For all taxable years commencing after December 31, 2020,
100% of global intangible low-taxed income under section 951A of the
federal internal revenue code of 1986, before any deductions allowed
under section 250(a)(1)(B) of such code.
(xxvi) (1) For all taxable years commencing after December 31,
2020, the amount of any interest expense paid or accrued in the current
taxable year and disallowed as a deduction pursuant to section 163(j) of
the federal internal revenue code.
(2) For purposes of this paragraph, an interest expense is considered
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paid or accrued only in the first taxable year the deduction would have
been allowable pursuant to section 163 of the federal internal revenue code
if the limitation pursuant to section 163(j) of the federal internal revenue
code did not exist.
(3) For tax year 2021, an amount equal to the sum of any interest
expenses paid or accrued in tax years 2018, 2019 and 2020 less the sum of
amounts allowed as a deduction pursuant to section 163 of the federal
internal revenue code in tax years 2018, 2019 and 2020.
(xxvii) For taxable years commencing after December 31, 2020, the
amount disallowed as a deduction pursuant to section 274 of the federal
internal revenue code of 1986 for meal expenditures shall be allowed to
the extent such expense was deductible for determining federal income tax
and was allowed and in effect on December 31, 2017.
(xxviii) For all taxable years beginning after December 31, 2021: (1)
The amount contributed to a first-time home buyer savings account
pursuant to K.S.A. 2024 Supp. 58-4903, and amendments thereto, in an
amount not to exceed $3,000 for an individual or $6,000 for a married
couple filing a joint return; or (2) amounts received as income earned from
assets in a first-time home buyer savings account. For all taxable years
beginning after December 31, 2022, contributions made to a first-time
home buyer savings account pursuant to subparagraph (1) on and after
January 1 but prior to the date required for filing a return pursuant to
K.S.A. 79-3221, and amendments thereto, of the successive taxable year
may be elected by the taxpayer to apply to the prior taxable year if such
election is made at the time of filing the return. No contribution shall be
used as a modification pursuant to subparagraph (1) in more than one
taxable year.
(xxix) For taxable years beginning after December 31, 2017, for an
individual taxpayer who carried back federal net operating losses arising in
a taxable year beginning after December 31, 2017, and before January 1,
2021, pursuant to section 172(b)(1) of the federal internal revenue code as
amended by the coronavirus aid, relief, and economic security act
(CARES act), the amount of such federal net operating loss carryback for
each applicable year. If the amount of such federal net operating loss
carryback exceeds the taxpayer's Kansas adjusted gross income for such
taxable year, the amount thereof that exceeds such Kansas adjusted gross
income may be carried forward as a subtraction modification in the
following taxable year or years until the total amount of such federal net
operating loss carryback has been deducted, except that no such unused
amount shall be carried forward for deduction as a subtraction
modification after the 20
th
taxable year following the taxable year of the
net operating loss. Notwithstanding any other provision of law to the
contrary, an extension of time shall be allowed for a claim for refund or
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amended return for tax years 2018, 2019 or 2020 limited to the application
of the provisions of this paragraph and such claim for refund or amended
return must be filed on or before April 15, 2025.
(xxx) For all taxable years beginning after December 31, 2024: (1)
The amount contributed to an adoption savings account pursuant to K.S.A.
2024 Supp. 38-2503, and amendments thereto, in an amount not to exceed
$6,000 for an individual or $12,000 for a married couple filing a joint
return; or (2) amounts received as income earned from assets in an
adoption savings account.
(xxxi) For all taxable years beginning after December 31, 2025, the
amount of any state income tax refund received applicable to the
education opportunity tax credit pursuant to section 1, and amendments
thereto, to the extent included in federal adjusted gross income of the
taxpayer.
(d) There shall be added to or subtracted from federal adjusted gross
income the taxpayer's share, as beneficiary of an estate or trust, of the
Kansas fiduciary adjustment determined under K.S.A. 79-32,135, and
amendments thereto.
(e) The amount of modifications required to be made under this
section by a partner which relates to items of income, gain, loss, deduction
or credit of a partnership shall be determined under K.S.A. 79-32,131, and
amendments thereto, to the extent that such items affect federal adjusted
gross income of the partner.
Sec. 3. K.S.A. 2024 Supp. 79-32,117 is hereby repealed.
Sec. 4. This act shall take effect and be in force from and after its
publication in the statute book.
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