So, Am I Really Going to Have to Pay Kansas Income Tax in April?!?
By Woods & Durham, Jul 27 2017 09:52PM
By now, you've heard the rumors... Last month, Kansas lawmakers increased our income taxes. There are additional tax brackets, the tax rates are higher and business income is now subject to income tax. This would lead most to believe their tax bills will be increasing but, that isn't the whole story.
The Bright Side
Some items eliminated with the 2012 Kansas tax cuts have been resurrected! The credit for child and dependent care is back at 12.5% for 2018 and will grow to 25% in 2020. If you've been carrying forward or have a current year Federal Net Operating Loss, it is now also allowable on your Kansas return. Federal Itemized Deductions that have been reduced in Kansas calculations will now be phased back in and allowed in full by 2020. Most importantly, no taxpayer will be assessed penalties or interest due to underpayment of Kansas tax as a result of these tax law changes, so long as the tax is paid on or before April 17, 2018.
What Should I Do Now?
If you are an employee and have Kansas Income Tax withheld from your paycheck, the withholding tables changed on July 1st. You may notice more withholding deducted from your paychecks throughout the remainder of 2017 to make up for the retroactive tax increase effective January 1, 2017.
If you make quarterly estimated tax payments to Kansas, the tax increase will not be reflected in the quarterly payment coupons provided with your 2016 tax retrun. If the thought of paying a tax bill in April is bothersome, the remaining quarterly tax payments for 2017 could be recalculated to reflect the increased tax rates.
In either of the above situations, if there is a tax balance due to Kansas for 2017 after the dust settles, it will be penalty and interest-free.
Still Not Sure?
Everyone's tax situation is unique and we're here to help and offer professional advice tailored to your situation. Give us a call if you have any lingering questions. We would be more than happy to visit with you!