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KS Notice 22-03 Kansas Income Tax; Privilege Tax; Insurance Premiums Tax 2022-07-01

What is the Kansas tax credit for contributions to community and technical colleges?

Short answer: Kansas Notice 22-03 explains a tax credit for contributions to community colleges and technical colleges, created by 2022 House Bill 2239 (Section 42), which amended K.S.A. 79-32,261. For tax years 2022 through 2026, a taxpayer who contributes to a designated Kansas community college or technical college for capital improvements, deferred maintenance, or the purchase of technology or equipment may claim a credit against income tax, the insurance premium tax (K.S.A. 40-252), or the financial-institution privilege tax. The credit equals 60% of the amount contributed (cash, stocks and bonds, personal property, or real estate) beginning July 1, 2022. It is capped at $250,000 per taxpayer per year, $500,000 in total credits per college per year, and $5,000,000 in aggregate statewide per year. The credit is not refundable and cannot be carried over. Contributions go to the college's capital outlay fund (K.S.A. 71-501a), and the process must be structured so contributions qualify as charitable deductions for federal income tax. The credit is claimed on Schedule K-84.

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This page answers the general question as of 2022. Ezel answers yours, under current Kansas tax law, with citations.

Disclaimer: This is an official Kansas Department of Revenue Notice: public guidance the Department issues to explain Kansas tax law, most often a newly enacted statute. It states the Department's general interpretation and administration of the law; it does not have the force of law and is not a private ruling issued to any one taxpayer. It reflects the statutes, regulations, and rates in effect on its issue date and may since have been amended or superseded by a later notice or law change, so confirm it is still current before relying on it. Kansas state and local sales and use taxes are administered centrally by the Department, so there is no self-collected home-rule city tax outside its scope. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

Kansas Notice 22-03 explains a tax credit for contributions to community colleges and technical colleges, created by 2022 House Bill 2239 (Section 42), which amended K.S.A. 79-32,261.

The credit. For tax years 2022 through 2026, a taxpayer who contributes to a designated Kansas community college or technical college for capital improvements, deferred maintenance, or the purchase of technology or equipment may claim a credit against the Kansas income tax, the insurance premium tax or privilege fees under K.S.A. 40-252, or the privilege tax on financial institutions. The credit equals 60% of the amount contributed. Contributions may be cash, stocks and bonds, personal property, or real estate, made on or after July 1, 2022.

Caps. The credit for each taxpayer may not exceed $250,000 per tax year; total credits for contributions to any one college may not exceed $500,000 per tax year; and the aggregate of all credits may not exceed $5,000,000 for each tax year. The credit reduces the taxpayer's liability for the year the contribution is made; it is not refundable and cannot be carried over.

Where the money goes. Contributions are deposited to the college's capital outlay fund under K.S.A. 71-501a. The contribution process must be developed so that contributions qualify as charitable contributions deductible for federal income tax purposes.

Designated colleges. The notice lists the designated community colleges (such as Allen, Barton, Butler, Johnson County, and Kansas City Kansas) and technical colleges (such as Flint Hills, Manhattan Area, Salina Area, and Washburn Institute of Technology).

How to claim it. Complete Schedule K-84 and file it with your Kansas income or privilege tax return.

What this means for you

Donors to community and technical colleges

  • A contribution to a designated Kansas community or technical college for capital, maintenance, technology, or equipment earns a Kansas credit worth 60% of the gift, for tax years 2022-2026.
  • The credit can offset income tax, the insurance premium tax, or the bank privilege tax, but it is not refundable and cannot be carried over -- so size the gift to your liability.
  • Watch the caps: $250,000 per donor, $500,000 per college, and $5 million statewide, each per year.

Tax professionals

  • Confirm the contribution went to a designated college's capital outlay fund and that it also qualifies as a federal charitable deduction. Claim the credit on Schedule K-84.

Common questions

How much is the credit? 60% of the amount contributed to a designated community or technical college for qualifying purposes.

Which years does it cover? Tax years 2022 through 2026 (contributions on or after July 1, 2022).

Against what taxes? Kansas income tax, the insurance premium tax, or the financial-institution privilege tax.

Are there limits? Yes -- $250,000 per taxpayer, $500,000 per college, and $5,000,000 statewide, each per tax year. The credit is not refundable and cannot be carried over.

What form do I use? Schedule K-84, filed with your income or privilege tax return.

Citations and references

  • House Bill 2239 (2022), Section 42 -- amended K.S.A. 79-32,261 to provide the community/technical college contribution credit.
  • K.S.A. 79-32,261 -- credit equal to 60% of qualifying contributions to a designated community or technical college for tax years 2022-2026, with per-taxpayer, per-college, and aggregate caps.

Source

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.gov
Mark A. Burghart, Secretary Laura Kelly, Governor

                                      NOTICE 22-03

                COMMUNITY COLLEGE AND TECHNICAL COLLEGE
                       CONTRIBUTIONS TAX CREDIT

                                      (JULY 1, 2022)

   During the 2022 Legislative Session House Bill 2239 was passed and signed into law.

Section 42 of the Bill amends K.S.A. 79-32,261 and provides an income or privilege tax credit for
tax years 2022, 2023, 2024, 2025, and 2026, for contributions to a community college or technical
college for capital improvements, deferred maintenance or the purchase of technology or
equipment.

   The amount of the credit is limited to 60% of the amount contributed and taxpayers may

begin making contributions to a designated community college or designated technical college
beginning July 1, 2022. Contributions shall include the donation of cash, stocks and bonds,
personal property and real estate. The amount of the credit awarded for each taxpayer shall not
exceed $250,000 per tax year. The total of credits allowed for contributions to any one community
college or technical college shall not exceed $500,000 per tax year. In addition, the aggregate
amount of credits allowed is limited to $5,000,000 for each tax year.

   The credit reduces the taxpayer's tax liability for the year the contribution is made. The

credit is not refundable and cannot be carried over to another year.

   Contributions may be made to the following community colleges and technical

colleges.

                            Designated Community Colleges

Allen Community College Highland Community College
Barton Community College Hutchinson Community College
Butler Community College Independence Community College
Cloud County Community College Johnson County Community College
Coffeyville Community College Kansas City Kansas Community College
Colby Community College Labette Community College
Cowley Community College Neosho County Community College
Dodge City Community College Pratt Community College
Fort Scott Community College Seward County Community College
Garden City Community College

                            Designated Technical Colleges

Flint Hills Technical College Salina Area Technical College
Manhattan Area Technical College Washburn Institute of Technology
North Central Kansas Technical College WSU Campus of Applied Sciences and Technology
Northwest Kansas Technical College

Amended Language

 Specifically, the amendments to K.S.A. 79-32,261(a)(2) provide:

       (a)(2) On and after July 1, 2022, any taxpayer who contributes in the manner
 prescribed by this paragraph to a community college or technical college located in Kansas
 for capital improvements, deferred maintenance or the purchase of technology or equipment
 shall be allowed a credit against the tax imposed by the Kansas income tax act, the premium
 tax or privilege fees imposed pursuant to K.S.A. 40-252, and amendments thereto, or the
 privilege tax as measured by net income of financial institutions imposed pursuant to article
 11 of chapter 79 of the Kansas Statutes Annotated, and amendments thereto. The tax credit
 allowed by this paragraph is applicable for the tax year 2022 for any contributions made on
 and after July 1, 2022, and for the tax years 2023, 2024, 2025 and 2026 for any contributions
 made during the entire tax year. The amount of the credit allowed by this paragraph shall
 equal 60% of the total amount contributed during the taxable year by the taxpayer to a
 community college or a technical college located in Kansas for such purposes. Prior to the
 issuance of any tax credits pursuant to this paragraph, the structure of the process in which
 contributions received by a community college or technical college qualify as tax credits
 allowed and issued pursuant to this paragraph shall be developed by a community college
 and technical college in consultation with the secretary of revenue and the foundation or
 endowment association of any such community college or technical college in a manner that
 complies with requirements specified in the federal internal revenue code of 1986, as
 amended, so that contributions qualify as charitable contributions allowable as deductions
 from federal adjusted gross income.

 K.S.A. 79-32,261(b)(4) provides:

       Upon receipt of any such contributions to a community college or technical college
 made pursuant to the provisions of subsection (a) (2), the treasurer of the community college
 or technical college shall deposit such contributions to the credit of the capital outlay fund
 of such community college or technical college established as provided by K.S.A. 71-501a,
 and amendments thereto. Expenditures from such fund shall be made for the purposes
 designated for such fund pursuant to law.

 K.S.A. 79-32,261(c)(3), (4) and (5) provides:

      (3) For the tax years 2022 through 2026, the amount of such credit awarded under
 subsection (a)(2) for each taxpayer shall not exceed $250,000 per tax year.

       (4) In no event shall the total of credits allowed under subsection (a)(2) for
 contributions to any one community college or technical college exceed $500,000 per tax
 year.
       (5) In no event shall the total of credits allowed under subsection (a)(2) exceed
 $5,000,000 for each tax year that the credit remains in effect.

Those claiming the credit should complete Schedule K-84, which must be filed with the

Kansas income or privilege tax return.

                               TAXPAYER ASSISTANCE

 Additional copies of this notice, forms or publications are available from our web site,

www.ksrevenue.gov. 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

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