New Law Changes Regarding Deductions for Kansas Taxpayers
How Will Senate Bill 50 Effect You?
In May 2021 Kansas legislators passed Senate Bill 50, overriding a veto by the governor. The new law, effective July 1, 2021, contains several changes that affect Kansas Individual Income Tax filers.
Changes To Standard Deduction Amounts
Starting in the 2021 tax year, the standard deduction amounts (reported on Line 4 of the Kansas return) have increased by $500. The increased amounts by filing status are as follows:
- Single – $3,500
- Married filing jointly – $8,000
- Married filing separately – $4,000
- Head of household – $6,000
Standard Deductions or Itemized Deductions
Previously, taxpayers could itemize deductions on their Kansas return only when they itemized deductions using Schedule A on their federal return. However, itemized deductions are only taken when they exceed federal standard deduction amounts. The Tax Cuts and Jobs Act, which passed in 2017, substantially increased the federal standard deductions which means far fewer Americans now itemize on their federal return.
Beginning with the 2021 tax year, Kansas taxpayers can now choose either the standard deduction or itemized deductions, based on if they itemized on their federal return. This is a favorable change for Kansas taxpayers, as deductions can now be itemized on the Kansas return once they exceed the new standard deduction of $8,000 (married filing jointly) or $4,000 (single). In 2020, the same taxpayers would have needed deductions in excess of $24,800 (married filing jointly) or $12,400 (single) to itemize on their Kansas return.
It’s important to consider recordkeeping, since many Kansas taxpayers who have always taken the standard deduction will find themselves itemizing for 2021. Receipts and other documentation of expenses related to the itemized deductions listed below should be kept and provided to your tax preparer.
What Qualifies For Itemized Deductions?
The following are expenses that are paid within the tax year can be included in itemized deductions:
- Charitable contributions
- Qualified medical expenses
- Home mortgage interest
- Real estate taxes
- Personal property taxes
Kansas Notice 21-02, which details the changes outlined above, can be found on the Kansas Department of Revenue website. If you have questions regarding how these changes will affect you, reach out to your Adams Brown advisor.