Kansas 2025-2026 Regular Session

Kansas Senate Bill SB75 Compare Versions

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1	1	Session of 2025
2	2	SENATE BILL No. 75
3	3	By Committee on Education
4	4	1-24
5	5	AN ACT concerning income taxation; relating to tax credits for education
6	6	expenses; providing an education opportunity tax credit for taxpayers
7	7	with eligible dependent children not enrolled in public school;
8	8	amending K.S.A. 2024 Supp. 79-32,117 and repealing the existing
9	9	section.
10	10	Be it enacted by the Legislature of the State of Kansas:
11	11	New Section 1. (a) For tax year 2025 and all tax years thereafter,
12	12	there shall be allowed as a credit against the tax liability of a resident
13	13	individual imposed under the Kansas income tax act an education
14	14	opportunity tax credit. For each dependent child eligible to enroll in
15	15	kindergarten or any of the grades one through 12 in a Kansas public school
16	16	but who was not so enrolled, the education opportunity tax credit shall be
17	17	as follows:
18	18	(1) $8,000 for each dependent child enrolled full time during the tax
19	19	year in a private school accredited by the state board of education or a
20	20	national or regional accrediting agency that is recognized by the state
21	21	board for the purpose of satisfying the teaching performance assessment
22	22	for professional licensure or is working in good faith toward such
23	23	accreditation; or
24	24	(2) $4,000 for each dependent child enrolled full time during the tax
25	25	year in a nonaccredited private school.
26	26	(b) (1) For tax year 2025, the total amount of credits allowed under
27	27	this section shall not exceed $125,000,000. For tax year 2026, and all tax
28	28	years thereafter, the maximum total amount of credits allowed under this
29	29	section shall be the same amount as the prior tax year, except that for any
30	30	tax year in which the annual tax credit amount that was used for the prior
31	31	tax year was equal to or greater than 90% of the maximum total amount of
32	32	credits allowed for such prior tax year, the maximum total amount of
33	33	credits shall increase by 25%. The department of revenue shall publish on
34	34	its website information identifying such increases in the maximum total
35	35	amount of tax credits.
36	36	(2) If the number of applications exceeds the available credit, the
37	37	secretary shall give priority to taxpayers who have previously received a
38	38	tax credit under this section.
39	39	(c) If the amount of the tax credit allowed by this section exceeds the
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76	76	taxpayer's income tax liability imposed under the Kansas income tax act
77	77	for such tax year, the excess amount shall be refunded to the taxpayer.
78	78	(d) A taxpayer shall not receive the education opportunity tax credit if
79	79	such taxpayer fails to provide a valid social security number issued by the
80	80	social security administration for each dependent child of the taxpayer for
81	81	whom the taxpayer is seeking such tax credit.
82	82	(e) A taxpayer shall not be eligible to claim the education opportunity
83	83	tax credit for a dependent child for a tax year in which such dependent
84	84	child received a scholarship pursuant to the tax credit for low income
85	85	students scholarship program act, K.S.A. 72-4351 et seq., and amendments
86	86	thereto.
87	87	(f) The department of revenue shall provide an eligible taxpayer the
88	88	opportunity to either claim and receive the education opportunity tax credit
89	89	in advance during the tax year or to claim the tax credit on their annual
90	90	income tax forms. If the taxpayer chooses to claim the tax credit in
91	91	advance during the tax year, the taxpayer may file an application at any
92	92	time during the tax year on a form prescribed by the department of
93	93	revenue.
94	94	(g) (1) The department of revenue may consult with the state
95	95	department of education only for the purpose of determining whether or
96	96	not a dependent child of a taxpayer claiming an education opportunity tax
97	97	credit is enrolled in a public school, as defined in K.S.A. 72-4352, and
98	98	amendments thereto, during the tax year for which the credit is claimed.
99	99	(2) By making a claim for the education opportunity tax credit, the
100	100	taxpayer acknowledges that the department of revenue may consult with
101	101	and receive information from the state department of education regarding
102	102	the public school enrollment status of any dependent child for whom the
103	103	tax credit is being claimed.
104	104	(h) On or before January 15 of each year, the department of revenue
105	105	shall prepare and submit to the legislature a report on the education
106	106	opportunity tax credit for the second preceding tax year. Such report shall
107	107	include, but not be limited to, the total amount of credits claimed and any
108	108	information on known fraudulent claims for the credit.
109	109	(i) Any person who intentionally files a false claim for the education
110	110	opportunity tax credit or receives the education opportunity tax credit but
111	111	does not send such person's dependent child to a private school as
112	112	described in subsection (a)(1) or (a)(2) shall be subject to a civil penalty in
113	113	an amount computed in the manner prescribed in K.S.A. 79-3228(e), and
114	114	amendments thereto.
115	115	(j) (1) In any legal proceeding challenging the application of this
116	116	section to a taxpayer receiving the tax credit, the state bears the burden of
117	117	establishing that the law is necessary and does not impose any undue
118	118	burden on the on the taxpayer.
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162	162	(2) No liability shall arise on the part of the department, the state or
163	163	any public school or school district based on the award of or use of an
164	164	education opportunity tax credit pursuant to this section.
165	165	(3) If any part of this section is challenged in a state court as violating
166	166	either the state or federal constitutions, taxpayers claiming the education
167	167	opportunity tax credit shall be permitted to intervene as of right in such
168	168	lawsuit for the purposes of defending the education opportunity tax credit's
169	169	constitutionality. However, for the purposes of judicial administration, a
170	170	court may require that all taxpayers file a joint brief, so long as they are
171	171	not required to join any brief filed on behalf of any named state defendant.
172	172	(4) If any provision of this section, or the application thereof to any
173	173	person or circumstances, is held invalid, such invalidity shall not affect
174	174	other provisions or applications of this section which can be given effect
175	175	without the invalid provision or application, and to this end the provisions
176	176	of this section are declared to be severable.
177	177	(k) This section shall be a part of and supplemental to the Kansas
178	178	income tax act.
179	179	Sec. 2. K.S.A. 2024 Supp. 79-32,117 is hereby amended to read as
180	180	follows: 79-32,117. (a) The Kansas adjusted gross income of an individual
181	181	means such individual's federal adjusted gross income for the taxable year,
182	182	with the modifications specified in this section.
183	183	(b) There shall be added to federal adjusted gross income:
184	184	(i) Interest income less any related expenses directly incurred in the
185	185	purchase of state or political subdivision obligations, to the extent that the
186	186	same is not included in federal adjusted gross income, on obligations of
187	187	any state or political subdivision thereof, but to the extent that interest
188	188	income on obligations of this state or a political subdivision thereof issued
189	189	prior to January 1, 1988, is specifically exempt from income tax under the
190	190	laws of this state authorizing the issuance of such obligations, it shall be
191	191	excluded from computation of Kansas adjusted gross income whether or
192	192	not included in federal adjusted gross income. Interest income on
193	193	obligations of this state or a political subdivision thereof issued after
194	194	December 31, 1987, shall be excluded from computation of Kansas
195	195	adjusted gross income whether or not included in federal adjusted gross
196	196	income.
197	197	(ii) Taxes on or measured by income or fees or payments in lieu of
198	198	income taxes imposed by this state or any other taxing jurisdiction to the
199	199	extent deductible in determining federal adjusted gross income and not
200	200	credited against federal income tax. This paragraph shall not apply to taxes
201	201	imposed under the provisions of K.S.A. 79-1107 or 79-1108, and
202	202	amendments thereto, for privilege tax year 1995, and all such years
203	203	thereafter.
204	204	(iii) The federal net operating loss deduction, except that the federal
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248	248	net operating loss deduction shall not be added to an individual's federal
249	249	adjusted gross income for tax years beginning after December 31, 2016.
250	250	(iv) Federal income tax refunds received by the taxpayer if the
251	251	deduction of the taxes being refunded resulted in a tax benefit for Kansas
252	252	income tax purposes during a prior taxable year. Such refunds shall be
253	253	included in income in the year actually received regardless of the method
254	254	of accounting used by the taxpayer. For purposes hereof, a tax benefit shall
255	255	be deemed to have resulted if the amount of the tax had been deducted in
256	256	determining income subject to a Kansas income tax for a prior year
257	257	regardless of the rate of taxation applied in such prior year to the Kansas
258	258	taxable income, but only that portion of the refund shall be included as
259	259	bears the same proportion to the total refund received as the federal taxes
260	260	deducted in the year to which such refund is attributable bears to the total
261	261	federal income taxes paid for such year. For purposes of the foregoing
262	262	sentence, federal taxes shall be considered to have been deducted only to
263	263	the extent such deduction does not reduce Kansas taxable income below
264	264	zero.
265	265	(v) The amount of any depreciation deduction or business expense
266	266	deduction claimed on the taxpayer's federal income tax return for any
267	267	capital expenditure in making any building or facility accessible to the
268	268	handicapped, for which expenditure the taxpayer claimed the credit
269	269	allowed by K.S.A. 79-32,177, and amendments thereto.
270	270	(vi) Any amount of designated employee contributions picked up by
271	271	an employer pursuant to K.S.A. 12-5005, 20-2603, 74-4919 and 74-4965,
272	272	and amendments thereto.
273	273	(vii) The amount of any charitable contribution made to the extent the
274	274	same is claimed as the basis for the credit allowed pursuant to K.S.A. 79-
275	275	32,196, and amendments thereto.
276	276	(viii) The amount of any costs incurred for improvements to a swine
277	277	facility, claimed for deduction in determining federal adjusted gross
278	278	income, to the extent the same is claimed as the basis for any credit
279	279	allowed pursuant to K.S.A. 79-32,204, and amendments thereto.
280	280	(ix) The amount of any ad valorem taxes and assessments paid and
281	281	the amount of any costs incurred for habitat management or construction
282	282	and maintenance of improvements on real property, claimed for deduction
283	283	in determining federal adjusted gross income, to the extent the same is
284	284	claimed as the basis for any credit allowed pursuant to K.S.A. 79-32,203,
285	285	and amendments thereto.
286	286	(x) Amounts received as nonqualified withdrawals, as defined by
287	287	K.S.A. 75-643, and amendments thereto, if, at the time of contribution to a
288	288	family postsecondary education savings account, such amounts were
289	289	subtracted from the federal adjusted gross income pursuant to subsection
290	290	(c)(xv) or if such amounts are not already included in the federal adjusted
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334	334	gross income.
335	335	(xi) The amount of any contribution made to the same extent the
336	336	same is claimed as the basis for the credit allowed pursuant to K.S.A. 74-
337	337	50,154, and amendments thereto.
338	338	(xii) For taxable years commencing after December 31, 2004,
339	339	amounts received as withdrawals not in accordance with the provisions of
340	340	K.S.A. 74-50,204, and amendments thereto, if, at the time of contribution
341	341	to an individual development account, such amounts were subtracted from
342	342	the federal adjusted gross income pursuant to subsection (c)(xiii), or if
343	343	such amounts are not already included in the federal adjusted gross
344	344	income.
345	345	(xiii) The amount of any expenditures claimed for deduction in
346	346	determining federal adjusted gross income, to the extent the same is
347	347	claimed as the basis for any credit allowed pursuant to K.S.A. 79-32,217
348	348	through 79-32,220 or 79-32,222, and amendments thereto.
349	349	(xiv) The amount of any amortization deduction claimed in
350	350	determining federal adjusted gross income to the extent the same is
351	351	claimed for deduction pursuant to K.S.A. 79-32,221, and amendments
352	352	thereto.
353	353	(xv) The amount of any expenditures claimed for deduction in
354	354	determining federal adjusted gross income, to the extent the same is
355	355	claimed as the basis for any credit allowed pursuant to K.S.A. 79-32,223
356	356	through 79-32,226, 79-32,228 through 79-32,231, 79-32,233 through 79-
357	357	32,236, 79-32,238 through 79-32,241, 79-32,245 through 79-32,248 or 79-
358	358	32,251 through 79-32,254, and amendments thereto.
359	359	(xvi) The amount of any amortization deduction claimed in
360	360	determining federal adjusted gross income to the extent the same is
361	361	claimed for deduction pursuant to K.S.A. 79-32,227, 79-32,232, 79-
362	362	32,237, 79-32,249, 79-32,250 or 79-32,255, and amendments thereto.
363	363	(xvii) The amount of any amortization deduction claimed in
364	364	determining federal adjusted gross income to the extent the same is
365	365	claimed for deduction pursuant to K.S.A. 79-32,256, and amendments
366	366	thereto.
367	367	(xviii) For taxable years commencing after December 31, 2006, the
368	368	amount of any ad valorem or property taxes and assessments paid to a state
369	369	other than Kansas or local government located in a state other than Kansas
370	370	by a taxpayer who resides in a state other than Kansas, when the law of
371	371	such state does not allow a resident of Kansas who earns income in such
372	372	other state to claim a deduction for ad valorem or property taxes or
373	373	assessments paid to a political subdivision of the state of Kansas in
374	374	determining taxable income for income tax purposes in such other state, to
375	375	the extent that such taxes and assessments are claimed as an itemized
376	376	deduction for federal income tax purposes.
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420	420	(xix) For taxable years beginning after December 31, 2012, and
421	421	ending before January 1, 2017, the amount of any: (1) Loss from business
422	422	as determined under the federal internal revenue code and reported from
423	423	schedule C and on line 12 of the taxpayer's form 1040 federal individual
424	424	income tax return; (2) loss from rental real estate, royalties, partnerships, S
425	425	corporations, except those with wholly owned subsidiaries subject to the
426	426	Kansas privilege tax, estates, trusts, residual interest in real estate
427	427	mortgage investment conduits and net farm rental as determined under the
428	428	federal internal revenue code and reported from schedule E and on line 17
429	429	of the taxpayer's form 1040 federal individual income tax return; and (3)
430	430	farm loss as determined under the federal internal revenue code and
431	431	reported from schedule F and on line 18 of the taxpayer's form 1040
432	432	federal income tax return; all to the extent deducted or subtracted in
433	433	determining the taxpayer's federal adjusted gross income. For purposes of
434	434	this subsection, references to the federal form 1040 and federal schedule
435	435	C, schedule E, and schedule F, shall be to such form and schedules as they
436	436	existed for tax year 2011, and as revised thereafter by the internal revenue
437	437	service.
438	438	(xx) For taxable years beginning after December 31, 2012, and
439	439	ending before January 1, 2017, the amount of any deduction for self-
440	440	employment taxes under section 164(f) of the federal internal revenue
441	441	code as in effect on January 1, 2012, and amendments thereto, in
442	442	determining the federal adjusted gross income of an individual taxpayer, to
443	443	the extent the deduction is attributable to income reported on schedule C,
444	444	E or F and on line 12, 17 or 18 of the taxpayer's form 1040 federal income
445	445	tax return.
446	446	(xxi) For taxable years beginning after December 31, 2012, and
447	447	ending before January 1, 2017, the amount of any deduction for pension,
448	448	profit sharing, and annuity plans of self-employed individuals under
449	449	section 62(a)(6) of the federal internal revenue code as in effect on January
450	450	1, 2012, and amendments thereto, in determining the federal adjusted gross
451	451	income of an individual taxpayer.
452	452	(xxii) For taxable years beginning after December 31, 2012, and
453	453	ending before January 1, 2017, the amount of any deduction for health
454	454	insurance under section 162(l) of the federal internal revenue code as in
455	455	effect on January 1, 2012, and amendments thereto, in determining the
456	456	federal adjusted gross income of an individual taxpayer.
457	457	(xxiii) For taxable years beginning after December 31, 2012, and
458	458	ending before January 1, 2017, the amount of any deduction for domestic
459	459	production activities under section 199 of the federal internal revenue code
460	460	as in effect on January 1, 2012, and amendments thereto, in determining
461	461	the federal adjusted gross income of an individual taxpayer.
462	462	(xxiv) For taxable years commencing after December 31, 2013, that
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506	506	portion of the amount of any expenditure deduction claimed in
507	507	determining federal adjusted gross income for expenses paid for medical
508	508	care of the taxpayer or the taxpayer's spouse or dependents when such
509	509	expenses were paid or incurred for an abortion, or for a health benefit plan,
510	510	as defined in K.S.A. 65-6731, and amendments thereto, for the purchase of
511	511	an optional rider for coverage of abortion in accordance with K.S.A. 40-
512	512	2,190, and amendments thereto, to the extent that such taxes and
513	513	assessments are claimed as an itemized deduction for federal income tax
514	514	purposes.
515	515	(xxv) For taxable years commencing after December 31, 2013, that
516	516	portion of the amount of any expenditure deduction claimed in
517	517	determining federal adjusted gross income for expenses paid by a taxpayer
518	518	for health care when such expenses were paid or incurred for abortion
519	519	coverage, a health benefit plan, as defined in K.S.A. 65-6731, and
520	520	amendments thereto, when such expenses were paid or incurred for
521	521	abortion coverage or amounts contributed to health savings accounts for
522	522	such taxpayer's employees for the purchase of an optional rider for
523	523	coverage of abortion in accordance with K.S.A. 40-2,190, and
524	524	amendments thereto, to the extent that such taxes and assessments are
525	525	claimed as a deduction for federal income tax purposes.
526	526	(xxvi) For all taxable years beginning after December 31, 2016, the
527	527	amount of any charitable contribution made to the extent the same is
528	528	claimed as the basis for the credit allowed pursuant to K.S.A. 72-4357, and
529	529	amendments thereto, and is also claimed as an itemized deduction for
530	530	federal income tax purposes.
531	531	(xxvii) For all taxable years commencing after December 31, 2020,
532	532	the amount of any interest expense paid or accrued in a previous taxable
533	533	year but allowed as a deduction pursuant to section 163 of the federal
534	534	internal revenue code in the current taxable year by reason of the
535	535	carryforward of disallowed business interest pursuant to section 163(j) of
536	536	the federal internal revenue code. For purposes of this paragraph, an
537	537	interest expense is considered paid or accrued only in the first taxable year
538	538	the deduction would have been allowable pursuant to section 163 of the
539	539	federal internal revenue code if the limitation pursuant to section 163(j) of
540	540	the federal internal revenue code did not exist.
541	541	(xxviii) For all taxable years beginning after December 31, 2021, the
542	542	amount of any contributions to, or earnings from, a first-time home buyer
543	543	savings account if distributions from the account were not used to pay for
544	544	expenses or transactions authorized pursuant to K.S.A. 2024 Supp. 58-
545	545	4904, and amendments thereto, or were not held for the minimum length
546	546	of time required pursuant to K.S.A. 2024 Supp. 58-4904, and amendments
547	547	thereto. Contributions to, or earnings from, such account shall also include
548	548	any amount resulting from the account holder not designating a surviving
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592	592	payable on death beneficiary pursuant to K.S.A. 2024 Supp. 58-4904(e),
593	593	and amendments thereto.
594	594	(xxix) For all taxable years beginning after December 31, 2024, the
595	595	amount of any contributions to, or earnings from, an adoption savings
596	596	account if distributions from the account were not used to pay for expenses
597	597	or transactions authorized pursuant to K.S.A. 2024 Supp. 38-2504, and
598	598	amendments thereto, or were not held for the minimum length of time
599	599	required pursuant to K.S.A. 2024 Supp. 38-2504, and amendments thereto.
600	600	Contributions to, or earnings from, such account shall also include any
601	601	amount resulting from the account holder not designating a surviving
602	602	payable on death beneficiary pursuant to K.S.A. 2024 Supp. 38-2504(e),
603	603	and amendments thereto.
604	604	(c) There shall be subtracted from federal adjusted gross income:
605	605	(i) Interest or dividend income on obligations or securities of any
606	606	authority, commission or instrumentality of the United States and its
607	607	possessions less any related expenses directly incurred in the purchase of
608	608	such obligations or securities, to the extent included in federal adjusted
609	609	gross income but exempt from state income taxes under the laws of the
610	610	United States.
611	611	(ii) Any amounts received which are included in federal adjusted
612	612	gross income but which are specifically exempt from Kansas income
613	613	taxation under the laws of the state of Kansas.
614	614	(iii) The portion of any gain or loss from the sale or other disposition
615	615	of property having a higher adjusted basis for Kansas income tax purposes
616	616	than for federal income tax purposes on the date such property was sold or
617	617	disposed of in a transaction in which gain or loss was recognized for
618	618	purposes of federal income tax that does not exceed such difference in
619	619	basis, but if a gain is considered a long-term capital gain for federal
620	620	income tax purposes, the modification shall be limited to that portion of
621	621	such gain which is included in federal adjusted gross income.
622	622	(iv) The amount necessary to prevent the taxation under this act of
623	623	any annuity or other amount of income or gain which was properly
624	624	included in income or gain and was taxed under the laws of this state for a
625	625	taxable year prior to the effective date of this act, as amended, to the
626	626	taxpayer, or to a decedent by reason of whose death the taxpayer acquired
627	627	the right to receive the income or gain, or to a trust or estate from which
628	628	the taxpayer received the income or gain.
629	629	(v) The amount of any refund or credit for overpayment of taxes on
630	630	or measured by income or fees or payments in lieu of income taxes
631	631	imposed by this state, or any taxing jurisdiction, to the extent included in
632	632	gross income for federal income tax purposes.
633	633	(vi) Accumulation distributions received by a taxpayer as a
634	634	beneficiary of a trust to the extent that the same are included in federal
635	635	1
636	636	2
637	637	3
638	638	4
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673	673	39
674	674	40
675	675	41
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677	677	43 SB 75 9
678	678	adjusted gross income.
679	679	(vii) Amounts received as annuities under the federal civil service
680	680	retirement system from the civil service retirement and disability fund and
681	681	other amounts received as retirement benefits in whatever form which
682	682	were earned for being employed by the federal government or for service
683	683	in the armed forces of the United States.
684	684	(viii) Amounts received by retired railroad employees as a
685	685	supplemental annuity under the provisions of 45 U.S.C. §§ 228b(a) and
686	686	228c(a)(1) et seq.
687	687	(ix) Amounts received by retired employees of a city and by retired
688	688	employees of any board of such city as retirement allowances pursuant to
689	689	K.S.A. 13-14,106, and amendments thereto, or pursuant to any charter
690	690	ordinance exempting a city from the provisions of K.S.A. 13-14,106, and
691	691	amendments thereto.
692	692	(x) (1) For taxable years beginning after December 31, 2021, the
693	693	amount of any federal credit disallowance under the provisions of 26
694	694	U.S.C. § 280C(a).
695	695	(2) For taxable years beginning after December 31, 2019, and ending
696	696	before January 1, 2022, 50% of the amount of the federal employee
697	697	retention credit disallowance under rules similar to the rules of 26 U.S.C. §
698	698	280C(a). The taxpayer shall be required to prove that such taxpayer
699	699	previously filed Kansas income tax returns and paid Kansas income tax on
700	700	the disallowed amount. Notwithstanding any other provision of law to the
701	701	contrary, any claim for refund or amended return relating to this
702	702	subparagraph shall be allowed to be filed on or before April 15, 2025, and
703	703	no claim for refund or amended return shall be allowed or filed after April
704	704	15, 2025.
705	705	(xi) For taxable years beginning after December 31, 1986, dividend
706	706	income on stock issued by Kansas venture capital, inc.
707	707	(xii) For taxable years beginning after December 31, 1989, amounts
708	708	received by retired employees of a board of public utilities as pension and
709	709	retirement benefits pursuant to K.S.A. 13-1246, 13-1246a and 13-1249,
710	710	and amendments thereto.
711	711	(xiii) For taxable years beginning after December 31, 2004, amounts
712	712	contributed to and the amount of income earned on contributions deposited
713	713	to an individual development account under K.S.A. 74-50,201 et seq., and
714	714	amendments thereto.
715	715	(xiv) For all taxable years commencing after December 31, 1996, that
716	716	portion of any income of a bank organized under the laws of this state or
717	717	any other state, a national banking association organized under the laws of
718	718	the United States, an association organized under the savings and loan
719	719	code of this state or any other state, or a federal savings association
720	720	organized under the laws of the United States, for which an election as an
721	721	1
722	722	2
723	723	3
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763	763	43 SB 75 10
764	764	S corporation under subchapter S of the federal internal revenue code is in
765	765	effect, which accrues to the taxpayer who is a stockholder of such
766	766	corporation and which is not distributed to the stockholders as dividends of
767	767	the corporation. For taxable years beginning after December 31, 2012, and
768	768	ending before January 1, 2017, the amount of modification under this
769	769	subsection shall exclude the portion of income or loss reported on schedule
770	770	E and included on line 17 of the taxpayer's form 1040 federal individual
771	771	income tax return.
772	772	(xv) The cumulative amounts not exceeding $3,000, or $6,000 for a
773	773	married couple filing a joint return, for each designated beneficiary that
774	774	are contributed to: (1) A family postsecondary education savings account
775	775	established under the Kansas postsecondary education savings program or
776	776	a qualified tuition program established and maintained by another state or
777	777	agency or instrumentality thereof pursuant to section 529 of the internal
778	778	revenue code of 1986, as amended, for the purpose of paying the qualified
779	779	higher education expenses of a designated beneficiary; or (2) an achieving
780	780	a better life experience (ABLE) account established under the Kansas
781	781	ABLE savings program or a qualified ABLE program established and
782	782	maintained by another state or agency or instrumentality thereof pursuant
783	783	to section 529A of the internal revenue code of 1986, as amended, for the
784	784	purpose of saving private funds to support an individual with a disability.
785	785	The terms and phrases used in this paragraph shall have the meaning
786	786	respectively ascribed thereto by the provisions of K.S.A. 75-643 and 75-
787	787	652, and amendments thereto, and the provisions of such sections are
788	788	hereby incorporated by reference for all purposes thereof. For all taxable
789	789	years beginning after December 31, 2022, contributions made to a
790	790	qualified tuition program account or a qualified ABLE program account
791	791	pursuant to this paragraph on and after January 1 but prior to the date
792	792	required for filing a return pursuant to K.S.A. 79-3221, and amendments
793	793	thereto, of the successive taxable year may be elected by the taxpayer to
794	794	apply to the prior taxable year if such election is made at the time of filing
795	795	the return. No contribution shall be used as a modification pursuant to this
796	796	paragraph in more than one taxable year.
797	797	(xvi) For all taxable years beginning after December 31, 2004,
798	798	amounts received by taxpayers who are or were members of the armed
799	799	forces of the United States, including service in the Kansas army and air
800	800	national guard, as a recruitment, sign up or retention bonus received by
801	801	such taxpayer as an incentive to join, enlist or remain in the armed services
802	802	of the United States, including service in the Kansas army and air national
803	803	guard, and amounts received for repayment of educational or student loans
804	804	incurred by or obligated to such taxpayer and received by such taxpayer as
805	805	a result of such taxpayer's service in the armed forces of the United States,
806	806	including service in the Kansas army and air national guard.
807	807	1
808	808	2
809	809	3
810	810	4
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812	812	6
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846	846	40
847	847	41
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849	849	43 SB 75 11
850	850	(xvii) For all taxable years beginning after December 31, 2004,
851	851	amounts received by taxpayers who are eligible members of the Kansas
852	852	army and air national guard as a reimbursement pursuant to K.S.A. 48-
853	853	281, and amendments thereto, and amounts received for death benefits
854	854	pursuant to K.S.A. 48-282, and amendments thereto, to the extent that
855	855	such death benefits are included in federal adjusted gross income of the
856	856	taxpayer.
857	857	(xviii) (A) For all taxable years beginning after December 31, 2007,
858	858	and ending before January 1, 2024, amounts received as benefits under the
859	859	federal social security act which are included in federal adjusted gross
860	860	income of a taxpayer with federal adjusted gross income of $75,000 or
861	861	less, whether such taxpayer's filing status is single, head of household,
862	862	married filing separate or married filing jointly.
863	863	(B) For all taxable years beginning after December 31, 2023, amounts
864	864	received as benefits under the federal social security act that are included
865	865	in federal adjusted gross income of a taxpayer.
866	866	(xix) Amounts received by retired employees of Washburn university
867	867	as retirement and pension benefits under the university's retirement plan.
868	868	(xx) For taxable years beginning after December 31, 2012, and
869	869	ending before January 1, 2017, the amount of any: (1) Net profit from
870	870	business as determined under the federal internal revenue code and
871	871	reported from schedule C and on line 12 of the taxpayer's form 1040
872	872	federal individual income tax return; (2) net income, not including
873	873	guaranteed payments as defined in section 707(c) of the federal internal
874	874	revenue code and as reported to the taxpayer from federal schedule K-1,
875	875	(form 1065-B), in box 9, code F or as reported to the taxpayer from federal
876	876	schedule K-1, (form 1065) in box 4, from rental real estate, royalties,
877	877	partnerships, S corporations, estates, trusts, residual interest in real estate
878	878	mortgage investment conduits and net farm rental as determined under the
879	879	federal internal revenue code and reported from schedule E and on line 17
880	880	of the taxpayer's form 1040 federal individual income tax return; and (3)
881	881	net farm profit as determined under the federal internal revenue code and
882	882	reported from schedule F and on line 18 of the taxpayer's form 1040
883	883	federal income tax return; all to the extent included in the taxpayer's
884	884	federal adjusted gross income. For purposes of this subsection, references
885	885	to the federal form 1040 and federal schedule C, schedule E, and schedule
886	886	F, shall be to such form and schedules as they existed for tax year 2011
887	887	and as revised thereafter by the internal revenue service.
888	888	(xxi) For all taxable years beginning after December 31, 2013,
889	889	amounts equal to the unreimbursed travel, lodging and medical
890	890	expenditures directly incurred by a taxpayer while living, or a dependent
891	891	of the taxpayer while living, for the donation of one or more human organs
892	892	of the taxpayer, or a dependent of the taxpayer, to another person for
893	893	1
894	894	2
895	895	3
896	896	4
897	897	5
898	898	6
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935	935	43 SB 75 12
936	936	human organ transplantation. The expenses may be claimed as a
937	937	subtraction modification provided for in this section to the extent the
938	938	expenses are not already subtracted from the taxpayer's federal adjusted
939	939	gross income. In no circumstances shall the subtraction modification
940	940	provided for in this section for any individual, or a dependent, exceed
941	941	$5,000. As used in this section, "human organ" means all or part of a liver,
942	942	pancreas, kidney, intestine, lung or bone marrow. The provisions of this
943	943	paragraph shall take effect on the day the secretary of revenue certifies to
944	944	the director of the budget that the cost for the department of revenue of
945	945	modifications to the automated tax system for the purpose of
946	946	implementing this paragraph will not exceed $20,000.
947	947	(xxii) For taxable years beginning after December 31, 2012, and
948	948	ending before January 1, 2017, the amount of net gain from the sale of: (1)
949	949	Cattle and horses, regardless of age, held by the taxpayer for draft,
950	950	breeding, dairy or sporting purposes, and held by such taxpayer for 24
951	951	months or more from the date of acquisition; and (2) other livestock,
952	952	regardless of age, held by the taxpayer for draft, breeding, dairy or
953	953	sporting purposes, and held by such taxpayer for 12 months or more from
954	954	the date of acquisition. The subtraction from federal adjusted gross income
955	955	shall be limited to the amount of the additions recognized under the
956	956	provisions of subsection (b)(xix) attributable to the business in which the
957	957	livestock sold had been used. As used in this paragraph, the term
958	958	"livestock" shall not include poultry.
959	959	(xxiii) For all taxable years beginning after December 31, 2012,
960	960	amounts received under either the Overland Park, Kansas police
961	961	department retirement plan or the Overland Park, Kansas fire department
962	962	retirement plan, both as established by the city of Overland Park, pursuant
963	963	to the city's home rule authority.
964	964	(xxiv) For taxable years beginning after December 31, 2013, and
965	965	ending before January 1, 2017, the net gain from the sale from Christmas
966	966	trees grown in Kansas and held by the taxpayer for six years or more.
967	967	(xxv) For all taxable years commencing after December 31, 2020,
968	968	100% of global intangible low-taxed income under section 951A of the
969	969	federal internal revenue code of 1986, before any deductions allowed
970	970	under section 250(a)(1)(B) of such code.
971	971	(xxvi) (1) For all taxable years commencing after December 31,
972	972	2020, the amount of any interest expense paid or accrued in the current
973	973	taxable year and disallowed as a deduction pursuant to section 163(j) of
974	974	the federal internal revenue code.
975	975	(2) For purposes of this paragraph, an interest expense is considered
976	976	paid or accrued only in the first taxable year the deduction would have
977	977	been allowable pursuant to section 163 of the federal internal revenue code
978	978	if the limitation pursuant to section 163(j) of the federal internal revenue
979	979	1
980	980	2
981	981	3
982	982	4
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1021	1021	43 SB 75 13
1022	1022	code did not exist.
1023	1023	(3) For tax year 2021, an amount equal to the sum of any interest
1024	1024	expenses paid or accrued in tax years 2018, 2019 and 2020 less the sum of
1025	1025	amounts allowed as a deduction pursuant to section 163 of the federal
1026	1026	internal revenue code in tax years 2018, 2019 and 2020.
1027	1027	(xxvii) For taxable years commencing after December 31, 2020, the
1028	1028	amount disallowed as a deduction pursuant to section 274 of the federal
1029	1029	internal revenue code of 1986 for meal expenditures shall be allowed to
1030	1030	the extent such expense was deductible for determining federal income tax
1031	1031	and was allowed and in effect on December 31, 2017.
1032	1032	(xxviii) For all taxable years beginning after December 31, 2021: (1)
1033	1033	The amount contributed to a first-time home buyer savings account
1034	1034	pursuant to K.S.A. 2024 Supp. 58-4903, and amendments thereto, in an
1035	1035	amount not to exceed $3,000 for an individual or $6,000 for a married
1036	1036	couple filing a joint return; or (2) amounts received as income earned from
1037	1037	assets in a first-time home buyer savings account. For all taxable years
1038	1038	beginning after December 31, 2022, contributions made to a first-time
1039	1039	home buyer savings account pursuant to subparagraph (1) on and after
1040	1040	January 1 but prior to the date required for filing a return pursuant to
1041	1041	K.S.A. 79-3221, and amendments thereto, of the successive taxable year
1042	1042	may be elected by the taxpayer to apply to the prior taxable year if such
1043	1043	election is made at the time of filing the return. No contribution shall be
1044	1044	used as a modification pursuant to subparagraph (1) in more than one
1045	1045	taxable year.
1046	1046	(xxix) For taxable years beginning after December 31, 2017, for an
1047	1047	individual taxpayer who carried back federal net operating losses arising in
1048	1048	a taxable year beginning after December 31, 2017, and before January 1,
1049	1049	2021, pursuant to section 172(b)(1) of the federal internal revenue code as
1050	1050	amended by the coronavirus aid, relief, and economic security act
1051	1051	(CARES act), the amount of such federal net operating loss carryback for
1052	1052	each applicable year. If the amount of such federal net operating loss
1053	1053	carryback exceeds the taxpayer's Kansas adjusted gross income for such
1054	1054	taxable year, the amount thereof that exceeds such Kansas adjusted gross
1055	1055	income may be carried forward as a subtraction modification in the
1056	1056	following taxable year or years until the total amount of such federal net
1057	1057	operating loss carryback has been deducted, except that no such unused
1058	1058	amount shall be carried forward for deduction as a subtraction
1059	1059	modification after the 20
1060	1060	th
1061	1061	taxable year following the taxable year of the
1062	1062	net operating loss. Notwithstanding any other provision of law to the
1063	1063	contrary, an extension of time shall be allowed for a claim for refund or
1064	1064	amended return for tax years 2018, 2019 or 2020 limited to the application
1065	1065	of the provisions of this paragraph and such claim for refund or amended
1066	1066	return must be filed on or before April 15, 2025.
1067	1067	1
1068	1068	2
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1109	1109	43 SB 75 14
1110	1110	(xxx) For all taxable years beginning after December 31, 2024: (1)
1111	1111	The amount contributed to an adoption savings account pursuant to K.S.A.
1112	1112	2024 Supp. 38-2503, and amendments thereto, in an amount not to exceed
1113	1113	$6,000 for an individual or $12,000 for a married couple filing a joint
1114	1114	return; or (2) amounts received as income earned from assets in an
1115	1115	adoption savings account.
1116	1116	(xxxi) For all taxable years beginning after December 31, 2025, the
1117	1117	amount of any state income tax refund received applicable to the
1118	1118	education opportunity tax credit pursuant to section 1, and amendments
1119	1119	thereto, to the extent included in federal adjusted gross income of the
1120	1120	taxpayer.
1121	1121	(d) There shall be added to or subtracted from federal adjusted gross
1122	1122	income the taxpayer's share, as beneficiary of an estate or trust, of the
1123	1123	Kansas fiduciary adjustment determined under K.S.A. 79-32,135, and
1124	1124	amendments thereto.
1125	1125	(e) The amount of modifications required to be made under this
1126	1126	section by a partner which relates to items of income, gain, loss, deduction
1127	1127	or credit of a partnership shall be determined under K.S.A. 79-32,131, and
1128	1128	amendments thereto, to the extent that such items affect federal adjusted
1129	1129	gross income of the partner.
1130	1130	Sec. 3. K.S.A. 2024 Supp. 79-32,117 is hereby repealed.
1131	1131	Sec. 4. This act shall take effect and be in force from and after its
1132	1132	publication in the statute book.
1133	1133	1
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