Kansas Earned Income Tax Credit
Qualifying for the Kansas Earned Income Credit
Kansas is among 28 states that offer their own versions of the federal Earned Income Tax Credit (EITC) in tax year 2020, as well as the District of Columbia.
Kansas' EITC dates back to 1998. It was expanded in 2007 and again in 2010, although the second increase was temporary.
The Kansas credit is refundable, as is the federal EITC. The state will send you the difference if your tax credit exceeds the amount of tax you owe when you finish calculating your state tax return.
You'll get more of a refund if you owe the state nothing.
History of the Kansas EITC
The 2010 increase pushed Kansas’ EITC up to 18% of what a resident taxpayer received for their EITC at the federal level, but this lasted only until 2012. As of 2020, Kansas' EITC rate was 17%, 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% 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%.
Then came Senate Bill 251 during the 2015 legislative session. Once again, lawmakers tried to slash the credit, dropping it to 8% this time. They also wanted to make the credit nonrefundable, so Kansas would keep the balance rather than refund the money to you if it exceeded what you owed in state taxes. The bill failed.
Senate Bill 200 contemplated increasing the state's EITC to 20% of the federal credit in 2015 as well, but that bill also failed.
Who Qualifies for the EITC?
All taxpayers who qualify for the federal Earned Income Tax Credit also qualify for the Kansas EITC. The qualifying rules are the same. You must:
- Have earned income from working for an employer or for yourself in your own business
- File a tax return
- Have a valid Social Security number
- Be a resident alien or U.S. citizen all year.
- Claim the federal Earned Income Tax Credit on your federal return
- Be a Kansas resident, rather than living outside the state and working in Kansas
You can't claim the credit without a qualifying dependent if you can be claimed as a dependent or a qualifying child on another taxpayer's return, and you must be at least age 25 but not more than age 65 on Dec. 31, the last day of the tax year.
This age requirement applies to both you and your spouse if you're married and file a joint return. You must also live in the United States for more than half the year.
The American Rescue Plan Act, passed in March 2021, temporarily expanded eligibility for the federal Earned Income Tax Credit in response to the COVID-19 pandemic. You may be able to qualify for it in 2021, even if your income was too high in previous years. You can also qualify if you are:
- Over age 65
- Between ages 19 and 25 but not a full-time student
Married taxpayers who file separate returns aren't eligible for the EITC, either at the federal level or in Kansas.
Special, more lenient rules exist for military members, clergy members, and the disabled, so check with a tax professional or tax clinic to find out if you qualify if you fall into any of these categories.
You can also use the IRS EITC Assistant online for qualifying guidance.
2020 Federal EITC Income Limits
Single, head of household, and widowed filers qualify for the federal EITC with no qualified child dependents at adjusted gross incomes (AGIs) of less than $15,820 as of the 2020 tax year, the tax return you'll file in 2021. The limit increases to $41,756 with one child, to $47,440 with two children, and to $50,594 with three or more child dependents.
The ARPA also raised income eligibility limits, including making more childless households eligible for the federal EITC.
Married filers of joint returns have higher AGI limits: $21,710 with no children, $47,646 with one child, $53,330 with two children, and $56,844 with three or more.
These figures are indexed for inflation based on the Chained Consumer Price Index for All Urban Consumers (C-CPI-U), so they can be expected to increase somewhat annually.
2020 Federal EITC Amounts
The maximum federal EITC credit amounts for the 2020 tax year are:
- $538 with no qualifying children
- $3,584 with one qualifying child
- $5,920 with two qualifying children
- $6,660 with three or more qualifying children
The ARPA temporarily increased the credit value of the EITC, in some cases tripling the benefit taxpayers can receive.
At 17% of the federal credit, the Kansas credit would work out to about $1,006 for a taxpayer with two qualifying children, in addition to the $5,920 received from the IRS for the federal credit.
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 state Earned Income Tax Credit. Simply enter the amount on line 17 of the return when you're finished.
You’ll need the amount of your federal Earned Income Tax Credit to complete the worksheet.
The Kansas Department of Revenue recommends filing your state return without claiming the credit if you’re filing your Kansas return first so you don’t yet know the amount of your federal EITC.
Pay any taxes that might be due. Then you can file an amended Kansas tax return to claim the state EITC at that time when you file your federal return and know the amount of your federal credit.