Does Kansas allow a child and dependent care tax credit, and how much is it?

Plain-English summary

Kansas Notice 17-07 explains the child and dependent care credit created by New Section 1 of Senate Bill 30 (2017) for resident individuals, effective with tax year 2018.

How it works. The Kansas credit is a percentage of the federal child and dependent care credit allowed under 26 U.S.C. Section 21 (the federal credit for the care of a qualifying individual to enable the taxpayer to work or look for work):

• 12.5% for tax year 2018
• 18.75% for tax year 2019
• 25% for tax year 2020 and all later years

Limits. The credit is nonrefundable and cannot exceed the Kansas tax due under K.S.A. 79-32,110 after all other credits are applied.

Social Security number requirement. To qualify, the individual claiming the credit, their spouse, and every dependent must have a valid Social Security number issued by the Social Security Administration.

What this means for you

Working families with child or dependent care costs

• If you claim the federal child and dependent care credit, you can claim a Kansas credit equal to 12.5% of it for 2018, rising to 25% by 2020.
• The credit only offsets Kansas tax you owe -- it is not refundable.

Tax preparers

• Confirm valid Social Security numbers for the taxpayer, spouse, and all dependents before claiming the credit.

Common questions

How much is the Kansas credit? 12.5% of the federal credit for 2018, 18.75% for 2019, and 25% for 2020 and after.

Is it refundable? No -- it is limited to the Kansas tax due after other credits.

When does it start? Tax year 2018.

What do I need to qualify? Valid Social Security numbers for you, your spouse, and every dependent.

Citations and references

• Senate Bill 30 (2017), New Section 1 -- created the Kansas child and dependent care credit for resident individuals, based on the federal credit under 26 U.S.C. Section 21.
• Credit percentages: 12.5% (2018), 18.75% (2019), 25% (2020 and after); nonrefundable; valid SSN required for taxpayer, spouse, and dependents.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 17-07

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 17-07

                         CREDIT FOR CHILD AND DEPENDENT CARE
                                     (JULY 1, 2017)

The 2017 Legislature enacted Senate Bill 30, which makes changes to Kansas income tax law
New Section 1 of the Bill creates a credit for child and dependent care expenses that may be
allowed against the tax liability of an individual who is a Kansas resident.

Internal Revenue Code Section 21 (26 U.S. Code § 21) allows a federal credit for expenses for the
care of a qualifying individual to enable a taxpayer to work or actively look for work. The Kansas
credit is based on the amount of federal credit allowed against the taxpayer's federal income tax
liability. The Kansas credit is limited to the amount of Kansas tax due, after all other credits have
been allowed. It is not refundable.

In order to qualify for the credit the individual claiming the credit, their spouse, and every
dependent of the individual must have a valid social security number that has been issued to them
by the social security administration.

The new credit is effective starting with tax year 2018, increases for tax year 2019, and increases
again for tax year 2020 and all tax years thereafter.

New Section 1 provides of the Bill provides:

        (a) There shall be allowed as a credit against the tax liability of a resident
  individual imposed under the Kansas income tax act an amount equal to 12.5% for tax
  year 2018; an amount equal to 18.75% for tax year 2019; and an amount equal to 25%
  for tax year 2020, and all tax years thereafter, of the amount of the credit allowed
  against such taxpayer's federal income tax liability pursuant to 26 U.S.C. § 21 for the
  taxable year in which such credit was claimed against the taxpayer's federal income
  tax liability.
        (b) The credit allowed by subsection (a) shall not exceed the amount of the tax
  imposed by K.S.A. 79-32,110, and amendments thereto, reduced by the sum of any other
  credits allowable pursuant to law.
        (c) No credit provided under this section shall be allowed to any individual who
  fails to provide a valid social security number issued by the social security
  administration, to such individual, the individual's spouse and every dependent of the
  individual.

                              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