Kansas Earned Income Tax Credit
Qualifying for the Kansas Earned Income Credit
Kansas is among 26 states and the District of Columbia offering its version of the federal earned income tax credit. Kansas' credit dates back to 1998. It was expanded in 2007 and again in 2010, although this second increase was temporary.
Like the federal EITC, the Kansas credit is refundable. If your credit exceeds the amount of your tax bill when you finish calculating your state taxes, Kansas will send you a check for the difference.
How Much Is the Credit?
The 2010 increase pushed Kansas’ EITC up to 18 percent of what a resident taxpayer received at the federal level, but this lasted only until 2012. As of 2015, Kansas' EITC rate was 17 percent, but this figure wasn’t arrived at without some legislative drama.
The Kansas Senate Committee on Assessment and Taxation initially reduced the state’s EITC to 9 percent in March 2013. The full Senate passed the bill, but the chairman of the House Taxation Committee balked. The bill was amended in April 2013, and the EITC ultimately remained at 17 percent.
Then came Senate Bill 251 during the 2015 legislative session. Once again, lawmakers tried to slash the credit, dropping it to 8 percent this time. They also wanted to make the credit nonrefundable, so if it exceeds what you owe in state taxes, Kansas would keep the balance rather than refund the money to you. The bill failed, but new life may be breathed into it in 2016. Don't assume you're going to receive the EITC in 2016 and later years—and how much you'll receive—without first checking current Kansas legislation.
Kansas imposes income restrictions on eligibility for its earned income credit. Working families with children can earn up to $52,000 annually, but the threshold may be less depending on your marital status and how many children you have. More significant benefits go to lower income families in the $10,000 to $23,000 income range.
You must have earned income—you work for an employer or work for yourself in your own business—and pay taxes to qualify. You must claim the federal earned income tax credit on your federal return. You must be a Kansas resident. You can’t live outside the state and simply work there.
How to Claim the Credit?
Page 8 of the instructions for Form K-40, the Kansas Individual Income Tax Return, provides a worksheet that walks you through the calculations to determine the exact amount of your credit. Simply enter the amount on line 16 of the return when you're finished.
You’ll need to know the amount of your federal earned income credit to complete the worksheet. If you’re filing your Kansas return first, so you don’t yet know the amount of your federal EITC, the Kansas Department of Revenue recommends filing your state return without claiming the credit. Pay any taxes that may be due. Then, when you file your federal return and know the amount of your federal credit, you can file an amended Kansas tax return to claim the earned income credit at that time.