Can Kansans deduct health care sharing ministry payments and shares on their state income tax?

Plain-English summary

2026 Senate Bill 368 — passed over the Governor's veto — created the Health Care Sharing Ministries Tax Deduction Act and amended K.S.A. 79-32,117 to add a new income tax subtraction modification, effective for tax years beginning after December 31, 2026. It has two parts:

• Health care sharing expenses (New Section 3(a)). A qualified individual may subtract from federal adjusted gross income the total qualified health care sharing expenses they paid during the year — the amounts paid to a health care sharing ministry. The subtraction is capped at $5,000 for an individual or $10,000 for a married couple filing jointly, and is allowed only to the extent the amount was not already subtracted or deducted in figuring federal adjusted gross income.
• Health care shares received (New Section 3(b)). A qualified health care share the taxpayer receives and uses for medical expenses is not taxable income for Kansas purposes. If such a share was treated as income federally and included in federal adjusted gross income, the taxpayer may subtract that amount.

The subtraction is claimed on the annual Kansas income tax return in the manner the Department prescribes, and the taxpayer must supply any documentation the Department needs to confirm eligibility and compute the amount (New Section 3(c)). Section 4 of the bill adds this as new subtraction modification (c)(xxxi) under K.S.A. 79-32,117(c). The law is effective July 1, 2026.

What this means for you

Members of a health care sharing ministry

• Starting with the 2027 tax year, the money you pay into a qualifying health care sharing ministry can reduce your Kansas taxable income — up to $5,000 (single) / $10,000 (married filing jointly) per year.
• The subtraction only counts to the extent you haven't already subtracted or deducted those amounts federally, so it does not double up with a federal deduction.
• If you receive a share from the ministry and use it for medical expenses, that share is not Kansas taxable income; if it showed up in your federal AGI, you can subtract it out on the Kansas return.

Tax preparers and accountants

• Watch for Department forms and instructions — the notice says the way documentation is provided will be developed and posted at ksrevenue.gov.
• The deduction applies to individuals ("qualified individual"); confirm the statutory definitions of "health care sharing ministry," "qualified health care share received," and "qualified health care sharing expenses" in the new act when advising clients.

Common questions

Q: When does this deduction start?
A: Tax years beginning after December 31, 2026 (the 2027 tax year and later). The law takes effect July 1, 2026.

Q: How much can I subtract for what I pay in?
A: Up to $5,000 if filing as an individual, or $10,000 for a married couple filing a joint return — and only to the extent not already deducted federally.

Q: Is a "share" I receive taxable in Kansas?
A: No, if you use it for medical expenses. If it was included in your federal adjusted gross income, you can subtract that amount on the Kansas return.

Q: What bill created this?
A: 2026 Senate Bill 368, which was enacted when the Legislature overrode the Governor's veto.

Citations and references

• Senate Bill 368 (2026) — the Health Care Sharing Ministries Tax Deduction Act (New Sections 1–3) and the amendment to K.S.A. 79-32,117 (Section 4); enacted over the Governor's veto; effective July 1, 2026.
• New Section 3(a) — subtraction for qualified health care sharing expenses paid, capped at $5,000 (individual) / $10,000 (married filing jointly), for tax years beginning after December 31, 2026; only to the extent not already subtracted or deducted federally.
• New Section 3(b) — a qualified health care share received and used for medical expenses is not Kansas taxable income; if included in federal AGI, it may be subtracted.
• New Section 3(c) — claimed on the annual Kansas return in the manner the Department prescribes, with required documentation.
• K.S.A. 79-32,117(c), new subtraction modification (c)(xxxi) (Section 4) — incorporates the terms, conditions, and limitations of New Section 3(a) and 3(b).
• Effective date: July 1, 2026 (applies to tax years beginning after December 31, 2026).

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 26-07

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 26-07

INCOME TAX SUBTRACTION MODIFICATION FOR
QUALIFIED HEALTH CARE SHARING EXPENSES AND QUALIFIED HEALTH CARE SHARES RECEIVED

(JULY 1, 2026)

During the 2026 Legislative Session Senate Bill 368 was passed and enacted as the Governor's veto was overridden. New Sections 1 through 3 of the Bill compose the Health Care Sharing Ministries Tax Deduction Act. Section 4 of the Bill amends K.S.A. 79-32,117, which provides a new income tax subtraction modification for qualified health care sharing expenses and for health care shares received and used for medical expenses.

New Section 1 provides the new act shall be known and may be cited as the health care sharing ministries tax deduction act.

New Section 2 provides definitions that are used in the act including: (a) "Health care sharing ministry"; (b) "Qualified health care share received"; (c) Qualified health care sharing expenses"; and (d) "Qualified individual".

New Section 3(a) provides that, for all taxable years beginning after December 31, 2026, a qualified individual taxpayer is allowed to subtract from their federal adjusted gross income an amount equal to the total amount of qualified healthcare sharing expenses they paid during the taxable year, as provided in K.S.A. 79-32,117(c). The subtraction modification is only allowed to the extent such amounts are not already subtracted or deducted from the taxpayer's federal adjusted gross income. The subtraction modification cannot exceed $5,000 for an individual or $10,000 for a married couple filing a joint return.

New Section 3(b) provides that, for all taxable years beginning after December 31, 2026, any qualified health care share received by a qualified individual taxpayer during the taxable year and used for medical expenses shall not be considered taxable income for Kansas income tax purposes. If such qualified health care share received is treated as income for federal income tax purposes and is included in the taxpayer's federal adjusted gross income, the taxpayer will be allowed to subtract an amount equal to the amount of the qualified health care share received from their federal adjusted gross income as provided in K.S.A. 79-32,117(c). The subtraction modification is only allowed to the extent such amounts are included in the taxpayer's federal adjusted gross income and are not already subtracted or deducted from the taxpayer's federal adjusted gross income.

New Section 3(c) provides the subtraction modification is to be claimed on the taxpayer's annual Kansas income tax return, in the manner prescribed by the Department of Revenue, and that the taxpayer shall provide the Department any information or documentation the Department

determines is necessary to determine eligibility and calculate the amount of the subtraction modification. Forms and/or instructions regarding the way this information or documentation is to be provided to the Department will be developed and posted to the Department's website: www.ksrevenue.gov.

Section 4 amends K.S.A. 79-32,117(c) to add the new subtraction modification (c)(xxxi).
The new subtraction modification incorporates the terms, conditions, and limitations of New Section 3(a) and 3(b) to determine the amount of the subtraction modification to be allowed.

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
Hearing Impaired TTY: 785-296-6461
Fax: 785-291-3614