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Category: Kansas

Kansas Subtractions

KPERS Lump Sum Distributions Exempt from Kansas Income Tax

Enter any amounts withdrawn from a qualified retirement account and include any earnings thereon to the extent that the amounts withdrawn were:

  1. Originally received as a KPERS lump sum payment at retirement that you rolled over into a qualified retirement account, and
  2. the amount entered is included in federal adjusted gross income (included in line 1 of Form K-40).

Note: Do not make an entry if the amount withdrawn consists of income that was originally received from retirement annuity contracts purchased for faculty and others employed by the State Board of Regents or by educational institutions under its management with either their direct contributions or through salary reduction plans or, a pension received from any Kansas first class city that is not covered by the Kansas Public Employee’s Retirement System.

Interest on US Government Obligations

Enter any interest or dividend income received from obligations or securities of any authority, commission or instrumentality of the United States and its possessions that was included in your federal adjusted gross income. This includes U.S. Savings Bonds, U.S. Treasury Bills, and the Federal Land Bank. You must reduce the interest amount by any related expenses (management or trustee fees, etc.) directly incurred in the purchase of these securities.

If you are a shareholder in a mutual fund that invests in both exempt and taxable federal obligations, only that portion of the distribution attributable to the exempt federal obligations may be subtracted here.

Retain a schedule showing the name of each U.S. Government obligation interest deduction claimed, as it may be requested by the Kansas Department of Revenue at a later date.

Interest from the following are taxable to Kansas and may NOT be entered on this line:

  • Federal National Mortgage Association (FNMA)
  • Government National Mortgage Association (GNMA)
  • Federal Home Loan Mortgage Corporation (FHLMC)

State Income Tax Refund

Enter any state or local income tax refund included as income on your federal return.

State Net Operating Loss Carry Forward

Enter the amount from line 14 of Schedule CRF if it is the first year of carry forward or line 16a-j of Schedule CRF if it is any of the years following. Enclose a Schedule CRF for each loss year.

Qualified Retirement Benefits

If you are receiving retirement benefits/pay, use this line to report retirement benefits exempt from Kansas income tax (do not include Social Security benefits on this line). For example, KPERS retirement benefits are subject to federal income tax, but exempt from Kansas income tax. You must make a specific entry on Schedule S to report these exempt benefits. Enter the total amount of benefits received from these plans that was included in your federal adjusted gross income. Do not enclose copies of the 1099R forms with your return but keep copies for your records in case the Kansas Department of Revenue requires verification at a later date.

Federal Retirement Benefits: Federal Civil Service Retirement or Disability Fund payments and any other amounts received as retirement benefits from employment by the federal government or for service in the United States Armed Forces.

Kansas Pension Plans:

  • Kansas Public Employees’ Retirement Annuities
  • Kansas Police and Firemen’s Retirement System Pensions
  • Kansas Teachers’ Retirement Annuities
  • Kansas Highway Patrol Pensions
  • Justices and Judges Retirement System
  • Board of Public Utilities
  • Income from retirement annuity contracts purchased for faculty and others employed by the State Board of Regents or by educational institutions under its management with either their direct contributions or through salary reduction plans
  • Amounts received by retired employees of Washburn University as retirement and pension benefits under the university’s retirement plan
  • Certain pensions received from Kansas first class cities that are not covered by the Kansas Public Employee’s Retirement System

Railroad Retirement Benefits: Any retirement plan administered by the U.S. Railroad Retirement Board, including U.S. Railroad Retirement Benefits, tier I, tier II, dual vested benefits, and supplemental annuities.

Learning Quest Education Savings Program Contribution

Enter the amount of contributions deposited in the Learning Quest Education Savings Program, or a qualified 529 tuition program established by another state, up to a maximum of $3,000 per student (beneficiary), or $6,000 per student (beneficiary) if your filing status is married filing joint.

Qualified Long-Term Care Insurance Premiums

Enter the amount of the premium costs paid for qualified LTC insurance contracts*. Limitations are as follows: Single, Head of Household, and Married Filing Separate filers purchasing a LTC contract for the named taxpayer will be limited to one (1) $1,000 subtraction modification per return. Married Filing Joint filers purchasing LTC contracts for both named taxpayers will be limited to two (2) $1,000 subtraction modifications per return (for a total subtraction of $2,000).

Note: A Kansas “qualified” LTC insurance contract is one that meets the definition of a federal “qualified” LTC insurance contract. This subtraction modification is in addition to any federal deduction.

Armed Forces Recruitment, Sign-up or Retention Bonus

Enter amounts received as a recruitment, sign up or retention bonus you received as an incentive to join, enlist or remain in the armed forces (including Kansas Army and Air National Guard), to the extent they are included in federal adjusted gross income. Also enter amounts you received for repayment of educational or student loans incurred by you or for which you are obligated that you received as a result of your service in the armed forces of the United States, to the extent included in federal adjusted gross income.

Other Subtractions from Federal Adjusted Gross Income:

Enter a total of the following subtractions from your federal adjusted gross income. You may NOT subtract the amount of your income reported to another state.

  • Individual Development Account (IDA): Enter amount of income earned on contributions deposited to an IDA established to pay for education expenses; job training costs; purchase of primary residence; or major repairs or improvement to a primary residence.
  • Jobs Tax Credit: Enter the amount of the federal targeted jobs tax credit disallowance claimed on your federal income tax return.
  • Kansas Venture Capital, Inc. Dividends: Enter dividend income received from Kansas Venture Capital, Inc.
  • KPERS Lump Sum Distributions: Employees who terminated KPERS employment after July 1, 1984, and elect to receive their contributions in a lump sum distribution will report their taxable contributions on their federal return. Subtract the amount of the withdrawn accumulated contributions or partial lump-sum payment(s) to the extent either is included in federal adjusted gross income.
  • Partnership, S Corporation or Fiduciary Adjustments: If you received income from a partnership, S Corporation, joint venture, syndicate, trust or estate, enter your proportionate share of any required subtraction adjustments. The partnership, S Corporation, or trustee will provide you with the necessary information to determine this amount.
  • S Corporation Privilege Adjustment: If you are a shareholder in a bank, savings and loan, or other financial institution that is organized as an S Corporation, enter the portion of any income received that was not distributed as a dividend. This income has already been taxed on the privilege tax return filed by the S Corporation financial institution.
  • Sale of Kansas Turnpike Bonds: Enter the gain from the sale of Kansas Turnpike Bonds that was included in your federal adjusted gross income.
  • Electrical Generation Revenue Bonds: Enter the gain from the sale of Electrical Generation Revenue Bonds that was included in your federal adjusted gross income.
  • Native American Indian Reservation Income: Enter the amount of income earned on a reservation, by a native American Indian residing on his or her tribal reservation, to the extent included in federal adjusted gross income.
  • Amortization – Energy Credits: Enter the amount of amortization deduction allowed relating to Credit Schedule K-73, K-77, K-79, K-82 or K-83, and the amount of amortization deduction allowed for carbon dioxide capture, sequestration or utilization machinery and equipment, or waste heat utilization system property. Note: 55% of the amortization costs may be subtracted in the first year and 5% may be subtracted for each of the succeeding nine years.