Did Kansas restore the disabled accessibility credit for homes and extend the business version?

Plain-English summary

Kansas Notice 14-06 (July 1, 2014) covers two disabled-accessibility credit changes in 2014 Senate Bill 265.

Dwellings credit reenacted (New Section 5). SB 265 reenacts the accessibility credit for dwellings that had been repealed in 2012, effective for tax year 2013 and later. A resident individual who makes expenditures to make all or part of an existing facility accessible to individuals with a disability -- where that facility is used as, or with, the taxpayer's principal dwelling or that of a lineal ascendant or descendant (including a small barrier-free living unit attached to it) -- may claim a credit equal to the applicable percentage of the expenditures or $9,000, whichever is less.

• The applicable percentage runs on a federal-adjusted-gross-income schedule: 100% at $0-$25,000, phasing down to 0% over $55,000.
• The credit may be claimed once every four years per dwelling.
• If the taxpayer's tax liability is under $2,250 in a claim year, part of the credit is refunded and the balance carried over, under the detailed carryover/refund rules in the statute (no carryover after the fourth succeeding year).
• Because the reenactment relates to tax year 2013, an amended 2013 return may be filed to claim the credit and any refund; amended returns are accepted immediately.

Trade-or-business credit extended (Section 6). Section 6 amends K.S.A. 79-32,177 to extend the separate accessibility credit for facilities or equipment used in a trade or business to more taxpayers. The 2012 changes had limited that credit to corporate income taxpayers for tax year 2013 and later; Section 6 repeals that limitation and extends the credit to all income taxpayers who qualify, effective for tax year 2014 and later.

What this means for you

Homeowners making accessibility modifications

• You may claim an income-based credit (up to $9,000) for making your principal dwelling -- or a parent's or child's principal dwelling -- accessible, once every four years, and you can amend a 2013 return to claim it.

Small business owners

• The credit for accessibility improvements to trade-or-business facilities or equipment, previously limited to corporations, is now available to all qualifying income taxpayers starting in tax year 2014.

Common questions

How large is the dwelling credit? The applicable percentage of the expenditures or $9,000, whichever is less, with the percentage based on federal adjusted gross income.

How often can I claim the dwelling credit? No more than once every four years.

Is any of it refundable? Yes -- if tax liability is under $2,250 in a claim year, part is refunded and the rest carried over under the statutory schedule.

What changed for businesses? The trade-or-business accessibility credit, limited to corporations in 2012, now covers all qualifying income taxpayers for 2014 and later.

Citations and references

• K.S.A. 79-32,177 -- the disabled accessibility credit statute; the dwellings credit was reenacted (New Section 5) and the trade-or-business credit extended (Section 6) by 2014 Senate Bill 265.
• 2014 Senate Bill 265, New Section 5 and Section 6 -- the amending legislation.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 14-06

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 14-06

                 Disabled Accessibility Credit For Dwellings Reenacted

            Disabled Accessibility Credit For Facilities Or Equipment Used
             In A Trade Or Businesses Extended to Additional Taxpayers

                                         (July 1, 2014)

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

Section 5 of the Bill reenacts the disabled accessibility credit of dwellings that was found in
K.S.A. 79-32,177 prior to its repeal during the 2012 Legislative Session. The reenacted
provisions are effective for tax year 2013 and later years. Specifically, New Section 5 provides:

       New Sec. 5. (a) Any resident individual taxpayer who makes expenditures for
 the purpose of making all or any portion of an existing facility accessible to
 individuals with a disability, which facility is used as, or in connection with, such
 taxpayer's principal dwelling or the principal dwelling of a lineal ascendant or
 descendant, including construction of a small barrier-free living unit attached to such
 principal dwelling, shall be entitled to claim a tax credit in an amount equal to the
 applicable percentage of such expenditures or $9,000, whichever is less, against the
 income tax liability imposed against such taxpayer pursuant to article 32 of chapter
 79 of the Kansas Statutes Annotated, and amendments thereto. Nothing in this
 subsection shall be deemed to prevent any such taxpayer from claiming such credit:
 (1) For each principal dwelling in which the taxpayer or lineal ascendant or
 descendant may reside, or facility used in connection therewith; or (2) more than
 once, but not more often than once every four-year period of time. The applicable
 percentage of such expenditures eligible for credit shall be as set forth in the
 following schedule:
                                                                                           % of
         Taxpayers                                                                    expenditures
      Federal Adjusted                                                                 eligible for
       Gross Income                                                                       credit
 $0 to $25,000 ......................................................................      100%
 Over $25,000 but not over $30,000 ........................................                 90%
 Over $30,000 but not over $35,000 ........................................                 80%
 Over $35,000 but not over $40,000 ........................................                 70%
 Over $40,000 but not over $45,000 ........................................                 60%
 Over $45,000 but not over $55,000 ........................................                 50%
 Over $55,000 ......................................................................            0

        Such tax credit shall be deducted from the taxpayer's income tax liability for the
 taxable year in which the expenditures are made by the taxpayer. If the amount of
 such tax credit exceeds the taxpayer's income tax liability for such taxable year, the
 amount thereof which exceeds such tax liability may be carried over for deduction
 from the taxpayer's income tax liability in the next succeeding taxable year or years
 until the total amount of the tax credit has been deducted from tax liability, except
 that no such tax credit shall be carried over for deduction after the fourth taxable year
 succeeding the taxable year in which the expenditures are made.
        (b) Notwithstanding the provisions of subsection (a), if the amount of the
 taxpayer's tax liability is less than $2,250 in the first year in which the credit is
 claimed under this section, an amount equal to the amount by which 1/4 of the credit
 allowable under this section exceeds such tax liability shall be refunded to the
 taxpayer and the amount by which such credit exceeds such tax liability less the
 amount of such refund may be carried over for the next three succeeding taxable
 years. If the amount of the taxpayer's tax liability is less than $2,250 in the second
 year in which the credit is claimed under this section, an amount equal to the amount
 by which 1/3 of the amount of the credit carried over from the first taxable year
 exceeds such tax liability shall be refunded to the taxpayer and the amount by which
 the amount of the credit carried over from the first taxable year exceeds such tax
 liability less the amount of such refund may be carried over for the next two
 succeeding taxable years. If the amount of the taxpayer's tax liability is less than
 $2,250 in the third year in which the credit is claimed under this section, an amount
 equal to the amount by which 1/2 of the amount carried over from the second taxable
 year exceeds such tax liability shall be refunded to the taxpayer and the amount by
 which the amount of the credit carried over from the second taxable year exceeds
 such tax liability less the amount of such refund may be carried over to the next
 succeeding taxable year. If the amount of the credit carried over from the third
 taxable year exceeds the taxpayer's income tax liability for such year, the amount
 thereof which exceeds such tax liability shall be refunded to the taxpayer.
        (c) The provisions of this section are applicable to tax year 2013, and all tax
 years thereafter.

  Senate Bill 265 is effective July 1, 2014. However, because the amendments made by New

Section 5 relate to tax year 2013 an amended return can be filed to claim the credit and, if
appropriate, a refund. Amended returns will be accepted immediately.

  Section 6 of the Bill amends K.S.A. 79-32,177 to extend the disabled accessibility credit

for facilities or equipment that is used in a trade of business to additional taxpayers. During the
2012 Legislative Session, K.S.A. 79-32,177 was amended to allow only corporate income tax
payers to claim the credit for tax year 2013 and all tax years thereafter. Section 6 has now
repealed this limitation and extends the ability to claim the credit to all income tax payers who
qualify. The provisions of Section 6 are effective for tax year 2014 and later years.

                               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