Kansas tax law changes effective 1-1-2013

Kansas tax law changes effective 1-1-2013

Individual tax rate reduced from 6.45% to 4.9%. A 25% tax savings.

Standard deduction for MFJ and HOH increased to $9,000. Single remains the same at $3,000.

All business, rental and farm income is excluded from KS tax. However, any losses from these entities will not be deductible against KS tax.

NOL carryovers will no longer be available except for C corporations so NOL’s need to be used in 2012.

For 2012 additional depreciation allowed on qualified property based on present value table. Repealed for 2013 except for C corps.

Most tax credits to individuals repealed in 2013 such as the Food sales tax rebate, Adoption expenses and Child day care expenses.

S corp and Ptrship will have separate basis calculation for Fed and KS since the net income (loss) will not be reported on the KS return. If no basis for KS, distributions will become taxable unless this part of the law is changed.

On sale of rental property, gain is taxed to KS but any passive loss carryovers are not deductible.

Nonresident of KS will end up paying taxes in their resident state.

Form 1099-MISC must be reported on Sch C to be deductible from KS. Can no longer report on Other Income line of Form 1040.

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