How did Senate Bill 30 expand Kansas itemized deductions and add a medical expense deduction?

Plain-English summary

Kansas Notice 17-06 explains how Senate Bill 30 (2017), Section 6, amended K.S.A. 79-32,120 to phase in an expansion of itemized deductions and add a medical expense deduction, beginning with tax years on and after January 1, 2018.

Who can itemize. An individual whose federal taxable income is determined by itemizing may elect the Kansas itemized deduction in lieu of the Kansas standard deduction.

The phase-in. Charitable contributions stay at 100% throughout. The allowed share of the other categories rises over three years:

• Qualified residence (mortgage) interest (IRC §163(h)) and real and personal property taxes (IRC §164(a)): 50% for 2018, 75% for 2019, 100% for 2020 and after.
• New medical expense deduction (IRC §213): 50% for 2018, 75% for 2019, 100% for 2020 and after.

(For 2015-2017, the statute had allowed 100% of charitable contributions and 50% of mortgage interest and property taxes, with no medical deduction.)

A reduction. The total itemized deductions are reduced by income taxes imposed by or paid to Kansas or another jurisdiction (to the extent deducted in the federal itemized deductions) and by certain depreciation deductions claimed under listed Kansas provisions.

What this means for you

Individuals who itemize

• Starting in 2018 you may deduct a growing share of mortgage interest and property taxes -- 50%, then 75%, then 100% by 2020 -- plus a new medical expense deduction on the same schedule.
• You must elect the Kansas itemized deduction instead of the standard deduction.

Taxpayers with high medical costs

• A Kansas medical expense deduction first becomes available in tax year 2018 (50%), reaching 100% by 2020.

Common questions

When does the expansion start? Tax years beginning on and after January 1, 2018.

What is the phase-in for mortgage interest and property taxes? 50% (2018), 75% (2019), 100% (2020 and after).

Is there a new medical deduction? Yes -- 50% (2018), 75% (2019), 100% (2020 and after).

Are charitable contributions affected? No -- they remain deductible at 100%.

Citations and references

• Senate Bill 30 (2017), Section 6 -- amended K.S.A. 79-32,120 to phase in itemized-deduction increases and add a medical expense deduction from tax year 2018.
• Percentages: mortgage interest and property taxes and medical expenses at 50% / 75% / 100% for 2018 / 2019 / 2020+; charitable contributions at 100%.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 17-06

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 17-06

                   ITEMIZED DEDUCTIONS FOR INDIVIDUAL INCOME TAX
                                   (JULY 1, 2017)

The 2017 Legislature enacted Senate Bill 30, which makes changes to Kansas income tax law.
Section 6 of the Bill amends K.S.A. 79-32,120 which allows itemized deductions for individuals.

The new language provides for a phased-in expansion of the amount of itemized deductions
currently allowed. This includes charitable contributions, interest on a residential mortgage, and
real and personal property taxes. In addition, the amendments allow medical expenses to be
claimed as an itemized deduction. The phased-in increases and new allowance start with tax years
beginning on and after January 1, 2018. As amended, the statute now provides:

         (a)(1) If federal taxable income of an individual is determined by itemizing
  deductions from such individual's federal adjusted gross income, such individual may
  elect to deduct the Kansas itemized deduction in lieu of the Kansas standard deduction.
         (2) For the tax year commencing on January 1, 2013, the Kansas itemized
  deduction of an individual means 70% of the total amount of deductions from federal
  adjusted gross income, other than federal deductions for personal exemptions, as
  provided in the federal internal revenue code with the modifications specified in this
  section.
         (3) For the tax year commencing on January 1, 2014, the Kansas itemized
  deduction of an individual means 65% of the total amount of deductions from federal
  adjusted gross income, other than federal deductions for personal exemptions, as
  provided in the federal internal revenue code with the modifications specified in this
  section.
         (4) For the tax years commencing on and after January 1, 2015, and ending before
  January 1, 2018, the Kansas itemized deduction of an individual means the following
  deductions from federal adjusted gross income, other than federal deductions for
  personal exemptions, as provided in the federal internal revenue code with the
  modifications specified in this section: (A) 100% of charitable contributions that
  qualify as charitable contributions allowable as deductions in section 170 of the federal
  internal revenue code; (B) 50% of the amount of qualified residence interest as
  provided in section 163(h) of the federal internal revenue code; and (C) 50% of the
  amount of taxes on real and personal property as provided in section 164(a) of the
  federal internal revenue code.
         (5) For the tax year commencing on and after January 1, 2018, and ending before
  January 1, 2019, the Kansas itemized deduction of an individual means the following
  deductions from federal adjusted gross income, other than federal deductions for
  personal exemptions, as provided in the federal internal revenue code with the
  modifications specified in this section: (A) 100% of charitable contributions that
  qualify as charitable contributions allowable as deductions in section 170 of the federal

 internal revenue code; (B) 50% of expenses for medical care allowable as deductions
 in section 213 of the federal internal revenue code; (C) 50% of the amount of qualified
 residence interest as provided in section 163(h) of the federal internal revenue code;
 and (D) 50% of the amount of taxes on real and personal property as provided in
 section 164(a) of the federal internal revenue code.
       (6) For the tax year commencing on and after January 1, 2019, and ending before
 January 1, 2020, the Kansas itemized deduction of an individual means the following
 deductions from federal adjusted gross income, other than federal deductions for
 personal exemptions, as provided in the federal internal revenue code with the
 modifications specified in this section: (A) 100% of charitable contributions that
 qualify as charitable contributions allowable as deductions in section 170 of the federal
 internal revenue code; (B) 75% of expenses for medical care allowable as deductions
 in section 213 of the federal internal revenue code; (C) 75% of the amount of qualified
 residence interest as provided in section 163(h) of the federal internal revenue code;
 and (D) 75% of the amount of taxes on real and personal property as provided in
 section 164(a) of the federal internal revenue code.
       (7) For the tax years commencing on and after January 1, 2020, the Kansas
 itemized deduction of an individual means the following deductions from federal
 adjusted gross income, other than federal deductions for personal exemptions, as
 provided in the federal internal revenue code with the modifications specified in this
 section: (A) 100% of charitable contributions that qualify as charitable contributions
 allowable as deductions in section 170 of the federal internal revenue code; (B) 100%
 of expenses for medical care allowable as deductions in section 213 of the federal
 internal revenue code; (C) 100% of the amount of qualified residence interest as
 provided in section 163(h) of the federal internal revenue code; and (D) 100% of the
 amount of taxes on real and personal property as provided in section 164(a) of the
 federal internal revenue code.
       (b) The total amount of deductions from federal adjusted gross income shall be
 reduced by the total amount of income taxes imposed by or paid to this state or any
 other taxing jurisdiction to the extent that the same are deducted in determining the
 federal itemized deductions and by the amount of all depreciation deductions claimed
 for any real or tangible personal property upon which the deduction allowed by K.S.A.
 2016 Supp. 79-32,221, 79-32,227, 79-32,232, 79-32,237, 79-32,249, 79-32,250, 79-
 32,255 or 79-32,256, and amendments thereto, is or has been claimed.

                                  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