How did Senate Bill 30 change the Kansas low income exclusion that zeroes out tax liability?

Plain-English summary

Kansas Notice 17-04 explains how Senate Bill 30 (2017), Section 4, amended K.S.A. 79-32,110 to lower the "low income exclusion" -- the taxable-income level below which certain individuals owe zero Kansas income tax -- starting with tax year 2018.

The change. Under the amended subsection (e):

• Tax years 2016 and 2017: zero tax liability for married filing jointly with taxable income of $12,500 or less, and all other individuals with $5,000 or less.
• Tax year 2018 and after: the thresholds drop to $5,000 or less (married filing jointly) and $2,500 or less (all other taxpayers).

How the income is figured. Kansas taxable income (K.S.A. 79-32,116) is computed by adding or subtracting Kansas modifications (K.S.A. 79-32,117) to federal adjusted gross income, then subtracting Kansas deductions and personal exemptions.

What this means for you

Lower-income individual filers

• For 2016-2017, joint filers under $12,500 (others under $5,000) of Kansas taxable income owed no tax.
• Beginning in 2018, the zero-liability thresholds fall to $5,000 (joint) and $2,500 (others), so some filers previously excluded will owe tax.

Tax preparers

• Apply the reduced 2018 thresholds when advising clients near the low-income cutoff.

Common questions

What is the low income exclusion? A taxable-income level below which an individual's Kansas tax liability is zero.

What are the new thresholds? For 2018 and after: $5,000 or less (married filing jointly) and $2,500 or less (all others).

When does the reduction start? Tax year 2018.

Citations and references

• Senate Bill 30 (2017), Section 4 -- amended K.S.A. 79-32,110(e) to lower the zero-liability thresholds beginning in tax year 2018.
• 2016-2017 thresholds: $12,500 (joint) / $5,000 (others); 2018+ thresholds: $5,000 (joint) / $2,500 (others).

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 17-04

Original ruling text

Tax Policy Group Phone: 785-296-3081
915 SW Harrison St FAX: 785-296-7928
Topeka KS 66612-1588 www.ksrevenue.org
Samuel M. Williams, Secretary Department of Revenue Sam Brownback, Governor

                                       NOTICE 17-04

                    CHANGES TO INDIVIDUAL LOW INCOME EXCLUSION
                                   (JULY 1, 2017)

The 2017 Legislature enacted an income tax increase via Senate Bill 30. Section 4 of the Bill
amends K.S.A. 79-32,110, the statute which establishes the rates of income tax in Kansas.

In addition to adjusting the rates of tax, Section 4 of the Bill also lowers the income level at which
certain individuals are exempt from Kansas income tax, starting with tax year 2018. Beginning in
tax year 2018 the low income exclusion is reduced to $5,000 for married individuals filing a joint
return, and to $2,500 for all other taxpayers. The amended provision, subsection (e), now provides:

         (e) Notwithstanding the provisions of subsections (a) and (b): (1) For
  tax year years 2016 and all tax years thereafter and 2017, married individuals filing
  joint returns with taxable income of $12,500 or less, and all other individuals with
  taxable income of $5,000 or less, shall have a tax liability of zero; and (2) for tax year
  2018, and all tax years thereafter, married individuals filing joint returns with taxable
  income of $5,000 or less, and all other individuals with taxable income of $2,500 or
  less, shall have a tax liability of zero.

The Kansas taxable income of an individual (see K.S.A. 79-32,116) is computed by adding or
subtracting any Kansas modifications (see K.S.A. 79-32,117) to or from his or her federal adjusted
gross income (to arrive at their Kansas adjusted gross income) and then subtracting his or her
Kansas deductions and personal exemptions.

                                   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
                                Topeka, KS 66612-1588
                                  Phone: 785-368-8222
                                   Fax: 785-291-3614