What is the Kansas disabled access credit for home accessibility renovations after 2021?

Plain-English summary

Kansas Notice 21-04 explains changes to the Disabled Access Credit made by 2021 Senate Bill 66 (Section 4), which amended K.S.A. 79-32,176a -- an income tax credit for home renovations made for a disabled family member's access.

Credit amount and income phase-out (subsection (a)). Effective for tax year 2021 and after, the credit equals the lesser of $15,000 or the applicable percentage of construction expenditures, with the percentage phasing out by income:

• Married filing jointly: full credit at FAGI of $60,000 or less, phasing out 10% for each $10,000 of FAGI, up to $150,000.
• All other individuals: full credit at FAGI of $40,000 or less, phasing out 10% for each $10,000 of FAGI, up to $130,000.

Partial refundability (subsection (b)). For tax year 2021 and after, if a taxpayer's liability is less than $3,750, portions of the credit are refundable over three years -- one-fourth in the first year, one-third in the second, and one-half in the third.

Cost-of-living adjustment (new subsection (c)). Beginning in tax year 2022, the maximum credit and the tax-liability threshold are increased by a cost-of-living amount determined under IRC section 1(f)(3).

What this means for you

Families renovating a home for a disabled member

• For 2021 and later, you may claim a credit of up to $15,000 (or the applicable percentage of your construction expenditures) for accessibility renovations.
• Your eligibility phases out with income -- full credit at FAGI of $60,000 or less (married filing jointly) or $40,000 or less (others), phasing to $150,000/$130,000.

Lower-income taxpayers

• If your tax liability is under $3,750, part of the credit is refundable over three years (one-fourth, then one-third, then one-half).

Future planners

• From tax year 2022, the maximum credit and the liability threshold are indexed for cost-of-living under IRC 1(f)(3).

Common questions

What does the credit cover? Home renovations made for a disabled family member's access.

How much is it? The lesser of $15,000 or the applicable percentage of construction expenditures, phased out by income.

Who gets the full credit? Married joint filers with FAGI of $60,000 or less, or other individuals with FAGI of $40,000 or less.

Is any of it refundable? Yes -- if liability is less than $3,750, one-fourth, one-third, and one-half of the credit is refundable in years one, two, and three.

Is the credit indexed? Yes -- from tax year 2022 the maximum credit and threshold are adjusted for cost-of-living under IRC section 1(f)(3).

Citations and references

• Senate Bill 66 (2021), Section 4 -- amended K.S.A. 79-32,176a, effective for tax year 2021 and after.
• K.S.A. 79-32,176a(a) -- credit amount (lesser of $15,000 or applicable percentage) and income phase-outs.
• K.S.A. 79-32,176a(b)-(c) -- partial refundability when liability is under $3,750, and cost-of-living indexing from tax year 2022 under IRC section 1(f)(3).

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 21-04

Original ruling text

Policy and Research
109 SW 9th Street Phone: 785-368-8222
PO Box 3506 Fax: 785-296-1279
Topeka KS 66601-3506 www.ksrevenue.org
Mark A. Burghart, Secretary Laura Kelly, Governor

                                         NOTICE 21-04

                                 Disabled Access Credit
                                         (JULY 1, 2021)

    During the 2021 Legislative Session Senate Bill 66 was passed and signed into law. Section

4 of the Bill amends K.S.A. 79-32,176a, which provides an income tax credit for home renovations
made for a disabled family member's access.

   The amendments to K.S.A. 79-32,176a(a) provide that, effective for tax year 2021 and all

tax years thereafter, the tax credit that may be claimed is equal to the lesser of either $15,000 or
the applicable percentage of construction expenditures. It distinguishes between married
individuals filing joint returns and all other individuals. It allows married individuals filing jointly
with FAGI of $60,000 or less to be eligible for the full credit. The bill phases out the credit for
married individuals fling jointly by increments of 10% for each $10,000 increase in FAGI, up to
$150,000. All other individuals with FAGI of $40,000 or less are eligible for the full credit. The
bill phases out the credit for all other individuals by increments of 10% for each $10,000 increase
in FAGI, up to $130,000.

   The amendments to K.S.A. 79-32,176a(b) provide that, effective for tax year 2021 and all

tax years thereafter, if a taxpayer's liability is less than $3,750, then portions of the credit may be
refundable in the first, second, and third years equal to one-fourth, one-third, and one-half of the
credit, respectively.

   K.S.A. 79-32,176a was also amended to include new subsection (c). This subsection

provides that, starting in tax year 2022 and for all subsequent tax years, the maximum tax credit
and the tax liability threshold shall be increased by a cost-of-living amount determined under
Internal Revenue Code section 1(f)(3).

                                    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
                                Scott Office Building, 1st Floor
                                       120 SE 10th Ave
                                        P. O. Box 3506
                                   Topeka, KS 66601-3506
                                     Phone: 785-368-8222
                                      Fax: 785-291-3614