Can a Kansas taxpayer subtract unreimbursed expenses for donating a human organ?

Plain-English summary

Kansas Notice 14-03 (July 1, 2014) announces a new income-tax subtraction for the costs of donating a human organ.

The change. 2014 Senate Bill 265 (Section 3) added subsection (c)(xxi) to K.S.A. 79-32,117. For all tax years beginning after December 31, 2013, a taxpayer may subtract from federal adjusted gross income the unreimbursed travel, lodging and medical expenditures that the taxpayer -- or a dependent -- while living, directly incurs to donate one or more human organs to another person for transplantation.

Limits. The subtraction is available only to the extent the expenses are not already subtracted on the federal return, and it cannot exceed $5,000 for any individual or dependent. "Human organ" means all or part of a liver, pancreas, kidney, intestine, lung or bone marrow.

Effective date / contingency. SB 265 is effective July 1, 2014. The provision takes effect only after the Secretary of Revenue certifies that the cost of the automated-tax-system changes will not exceed $20,000. The notice states it appears that cost will be met and the modification should be available for tax year 2014 returns -- but taxpayers should check the return instructions to confirm before filing. (The amendment was also carried in reconciliation House Bill 2143.)

What this means for you

Living organ donors

• If you (or your dependent) donated a qualifying organ and paid your own travel, lodging or medical costs, you may subtract up to $5,000 of those unreimbursed costs on your Kansas return, if not already deducted federally.

Tax preparers

• Confirm the modification is live for the tax year (check the K-40 instructions), verify the organ qualifies, and cap the subtraction at $5,000 per donor.

Common questions

How much can be subtracted? Up to $5,000 per individual or dependent.

Which organs qualify? All or part of a liver, pancreas, kidney, intestine, lung or bone marrow.

What expenses count? Unreimbursed travel, lodging and medical expenditures directly incurred for the donation, if not already subtracted federally.

When does it start? Tax years beginning after December 31, 2013 (tax year 2014), subject to the Secretary's $20,000 cost certification.

Citations and references

• K.S.A. 79-32,117(c)(xxi) -- new subtraction for unreimbursed human-organ-donation expenses, capped at $5,000.
• 2014 Senate Bill 265, Section 3 -- the amending legislation (also included in reconciliation House Bill 2143).

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 14-03

Original ruling text

Policy & Research Phone: 785-296-3081
915 SW Harrison St FAX: 785-296-7928
Topeka KS 66612-1588 www.ksrevenue.org
Nick Jordan, Secretary Department of Revenue Sam Brownback, Governor
Richard Cram, Director

                                      Notice 14-03

                     Expenses Related To Human Organ Donation
                                    (July 1, 2014)

 During the 2014 Legislative Session Senate Bill 265 was passed and signed into law.

Section 3 of the Bill amends K.S.A. 79-32,117, which concerns addition and subtraction
modifications for Kansas income tax purposes, to provide a subtraction modification for certain
expenses related to the donation of human organs for transplantation into another person.
Specifically, new subsection (c)(xxi), provides:

        (c) There shall be subtracted from federal adjusted gross income:
        (xxi) For all taxable years beginning after December 31, 2013, amounts equal to
 the unreimbursed travel, lodging and medical 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.

  Senate Bill 265 is effective July 1, 2014. At this time it appears the cost of implementing

this provision will not exceed $20,000 and that this modification will be available when
individual income tax returns are filed for tax year 2014. Before filing an individual income tax
return for tax year 2014, however, please check the instructions for confirmation that the
modification is available.

  Please note that the amendment to K.S.A. 79-32,117 found in Senate Bill 265 was later

included in House Bill 2143. This House Bill is a reconciliation bill. A reconciliation bill is
used when a statute is amended in two or more separate bills. K.S.A. 79-32,117 was included in

the reconciliation bill because it was amended by section 3 of Senate Bill 265 and by section 6 of
House Bill 2057.

                                 Taxpayer Assistance

Additional copies of this notice, forms or publications are available from our web site,
www.ksrevenue.org. If you have questions about this Notice, please contact:

                              Taxpayer Assistance Center
                             Kansas Department of Revenue
                             915 SW Harrison St., 1st Floor
                               Topeka, KS 66612-1588
                                 Phone: 785-368-8222
                                  Fax: 785-291-3614