On June 6th, 2017, the Kansas legislature overrode the governor’s veto to pass a large income tax increase that is retroactive to January 1, 2017.
Here are the quick points related to income taxes:
- Taxable income from sole proprietorships, partnerships, LLCs, and S corporations is now fully taxable in Kansas for 2017 and going forward. The good old days of the last four years are over!
- For 2017, the top income tax bracket is increased to 5.2% in a three-tier system. In 2018, the top rate will again increase to 5.7%.
- No change on the disallowance of medical expense deduction in 2017, but a phase-in of the deduction starts in 2018 with a full restoration in 2020.
- No penalty for not estimating taxes in 2017 provided that you pay in full all 2017 Kansas tax due by April 17, 2018. This is only for items of tax that changed with this bill.
- Net operating losses deductions are fully restored. The Kansas Department of Revenue will more than likely provide guidance before yearend on this point. I will summarize and post the details when I get them.
Everybodys’ taxes are going up in Kansas. Kansas is now close to where it was in 2012 with a few differences. One being anyone who is in a nursing home and deducting the medical expenses will have it even worse in 2017, but get partial relief in 2018. It has been rough for this group.
If you have any questions on the tax changes feel free to contact us.
Dan Busenbark, CPA