KANSAS INCOME TAX FORM K-40 and Schedule S

Kansas STTC Training - TY2018 Kansas What’s New Filing deadline is April 15, 2019 Tax Rates Married Filing Joint $0 - $30,000 3.10% (0% up to $5,000)* $30,001 - $60,000 5.25% $60,001 and over 5.70% Single, Head of Household, Married Filing Separate $0 - $15,000 3.10% (0% up to $2,500)* $15,001 - $30,000 5.25% $30,001 and over 5.70% *Required to file if Line 7, Taxable Income is greater than $0 Filing deadline is the same as Federal Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 Kansas What’s New Kansas is mailing tax refund 1099-Gs only to taxpayers that itemized in TY2017 All 1099-Gs will be available at www.ksrevenue.org Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 Kansas What’s New Child and Dependent Care Credit Restored The Child and Dependent Care Tax Credit is restored for individual income filers, effective TY2018. The Kansas credit is the following percentage of the Federal Child and Dependent Care Credit that is allowed against the taxpayer’s federal income tax liability. TY2018 12.50% TY2019 18.75% TY2020 25.00% (and all tax years thereafter) Like the Federal credit, this is a nonrefundable credit. 2017 Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 Kansas What’s New Low Income Exclusion No Kansas Tax Liability for low income individuals.* Married Filing Joint – Taxable Income - $0 - $5,000 All other individuals – Taxable Income - $0 - $2,500 *A Kansas Income Tax Return (K-40) must be filed to claim exclusion Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 Kansas What’s New Effective Tax Year 2018 Tax Year Allowable Itemized Deductions 2018 2019 2020 Qualified Charitable Contributions 100% 100% 100% Qualified Medical Expenses 50% 75% 100% Qualified Residential Interest 50% 75% 100% Taxes on Real and Personal Property 50% 75% 100% *May only itemize your deductions if deductions were itemized on the federal return. Filing deadline is the same as Federal Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 Kansas What’s New Achieving a Better Life Experience (ABLE) contributions Kansas Other state or agency or instrumentality Subtraction from KAGI Schedule S line A 15 Up to $3,000 ($6,000) MFJ Per beneficiary Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 Tax-Aide Policy Counselors may prepare returns that Are in Tax-Aide scope Are tax topics included in their training Includes training for nonresident states They feel comfortable to prepare Seek guidance from the Local Coordinator for uncomfortable situations such as: Rarely used procedures Decedent returns Amendments Rarely seen forms (e.g., 8606) New counselor uncertainty Issues with taxpayer Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 Deceased Taxpayer Married Filing Joint TaxSlayer Federal Section Basic Information Enter surviving spouse as the taxpayer First name on return Enter deceased as the spouse Second name on return Enter date of death May need additional documentation Kansas Form RF-9 Other proof of death 2017 This should have been done in the Federal Section. If it wasn’t, consider doing it before starting the Kansas Return Surviving spouse will be filer next year anyway – - name will pick up on carryover simplifies property tax refunds We will discuss Deceased Taxpayers later when we discuss miscellaneous Kansas Forms Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 Out of Scope Kansas Return without Federal Return Federal Out of Scope = Kansas Out of Scope Cannot prepare a paper Kansas return Kansas non-resident returns Includes MFJ when one spouse is a nonresident Kansas part-year resident It is IN Scope to prepare a Federal return without a state return Kansas STTC Training - TY2018

Kansas Filing Requirements A Kansas return is required when a Federal return is required or when Kansas Adjusted Gross Income exceeds the following amounts Note that if a Federal return is not required a state return may be required since the filing thresholds are significantly lower. Also note the filing thresholds for minor dependents. An adjustment from non-taxable scholarship to taxable, in maximizing American Opportunity Credit for example, may create a state filing requirement. Tax-Aide encourages us to file regardless of income. Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 Filing Extensions Kansas does not have separate form Federal extension includes Kansas extension If refund due, no extension needed 2017 Kansas STTC Training - TY2018

Innocent Spouse Relief If granted on Federal return Also granted on Kansas return 2017 Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 State Tax Process Review intake form and tax documents first Look for Out of Scope issues and non-resident state income Complete federal return Except for education credits Complete Kansas forms If needed, complete non-resident state forms TaxSlayer will auto-complete Kansas credit for taxes paid to other states If there are non-Kansas local taxes withheld or paid, KCMO earnings tax for example, complete the appropriate forms when required and adjust the taxes paid to other state by the net amount paid. Finalize education credits 2018 Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 State Income Tax Kansas All income received by a Kansas resident is taxable in Kansas unless specifically exempt Non-resident Income earned in a different state may also be taxed in that state 2017 Kansas STTC Training - TY2018

State Tax General Information See Kansas 2018 Income Tax Instructions Kansas Department of Revenue (KDOR) www.ksrevenue.org/personal.html Nonresident states See kssttc.org/NRStates.html for links to Colorado, Missouri, Nebraska, and Oklahoma income tax authorities 2017 Kansas STTC Training - TY2018

TaxSlayer State Section State tax returns appear in TaxSlayer after the Federal return data entry is completed. The Add State Return menu can be opened at any time using the left side menu bar. Used for both resident and non-resident state. The state section is available after the Basic Information is completed for the Federal return. Kansas STTC Training - TY2018

TaxSlayer State Section Must be Kansas resident to be in scope The first selection is for resident state TaxSlayer allows adding both resident and non-resident states Lived in two states during the tax year or work out of “home” state Resident State is Kansas for our AARP work Use Non-Resident for other state when Kansas resident works in another state(s) and files both a Kansas return and a return for the other state(s), W-2, 1099-misc Kansas resident received other state source income – gambling income, rents, oil leases. Kansas STTC Training - TY2018

TaxSlayer State Section When returning to the State Section after adding a state, the screen is a s shown. From here you can add, edit , or remove state returns. The CONTINUE button will exit the state returns and continue to the Summary/Print section– you can also jump to any other section on the left hand menu Kansas STTC Training - TY2018

Kansas Income Tax Forms Main Kansas form, similar to 1040 Schedule S Part A - Modifications (+/-) to Federal AGI May need manual entries Part B (Out of Scope) – Income Allocation for Nonresidents and Part-Year Residents Part C – Kansas Itemized Deductions Calculated by TaxSlayer 2017 TS will handle all these calculations, but you need to know where they appear on the forms - Need to explain to TP after QR Kansas STTC Training - TY2018

TaxSlayer Kansas Return Menu This is the TaxSlayer menu for Kansas Returns It appears when you select edit Kansas and the “Enter Myself” option. In TY2016, basic Kansas information was entered when entering information in the Federal Basic Information section. That is not the case this year, so you will need to open this screen and enter the county and school district information at a minimum. Once the state basic information is entered, TaxSlayer will prepare a K-40 and Schedule S. If adjustments are needed come back to this menu. Some examples are: Exempt pensions (other that Railroad Retirement Board Pensions require an adjustment Federal AGI (K-40 line 1) greater than $75,000 that includes a railroad pension requires and adjustment Learning quest and adoption credits need to be entered Use tax requires an adjustment You should always come back to this screen and “Exit State Return” to make sure any adjustments are saved. Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 K-40 Front Page – Heading The K-40 heading is mostly obtained from the Federal Section > Basic Information Information within the red circles will be entered in the Kansas Return > Basic Information Address Change School District County Kansas STTC Training - TY2018

K-40 Front Page – Amended, Filing, Residency, and Exemptions The Amended Return section will be completed if we amend the return, we will talk about amending later Everything else in these sections of the K-40 has already been entered From the Federal Section > basic information Filing Status Exemptions and Dependents When we selected Kansas, we selected Resident Kansas STTC Training - TY2018

K-40 Front Page Food Sales Tax Credit Question C will be answered on the Kansas Return > Basic Information page Once the Basic Information page is complete, TaxSlayer can determine the amount of Food Sales Tax Credit, if any. Kansas STTC Training - TY2018

TaxSlayer Kansas Return Menu This is the Kansas basic information screen Complete the county and school district information and the name or address change information If appropriate complete the disability information – If you complete a K-40H or Form 200 you will be asked again for disability information This is used for eligibility for the Food Sales Tax Credit Nonresident and part-year resident section is out of scope Kansas STTC Training - TY2018

Kansas Food Sales Tax Credit Partial credit for sales tax paid on food Non-Refundable credit Reduces tax owed No credit if no tax liability Credit is $125 per dependent on Federal 1040 Less dependents that are 18 years of age or older TaxSlayer calculates. Credit shows on K-40 line 17 Kansas STTC Training - TY2018

Kansas Food Sales Tax Credit Kansas resident all year, and Federal AGI was not more than $30,615, and One of the following; Was 55 or older all year, or Was totally and permanently disabled or blind all year, or had a dependent child: That lived with the taxpayer all year, and Was under age 18 all year, and Was claimed as exemption on your return 2017 TaxSlayer will calculate this if the taxpayer qualifies Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 K-40 Page 2 - Income Line 1, Federal AGI TaxSlayer brings amount from Federal Section +/- Line 2, Net Modifications to Federal AGI Schedule S line A18, Net modifications Schedule S lines A1 – A6, Additions Schedule S lines A7 – A17, Subtractions = Line 3, Kansas AGI 2017 Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 Schedule S Additions 2017 Kansas STTC Training - TY2018

TaxSlayer Kansas Return Menu This is the Kansas Addition to Income page. It applies to entries for Schedule S. These items are included in the Schedule S line A17 Net modification to federal adjusted gross income that flows to the K-40 line 2 Modifications. Line A1 generally transfers from the Federal Section, Income page, all the Federal tax exempt entries identified as taxable in Kansas. Line A2 generally transfers W2 KPERS contributions from the Federal section. Line A4 is a specific charitable contribution. If the taxpayer itemized and claims this Federal deduction, it needs to be added back to Federal AGI. The taxpayer claims a Kansas Credit on line 14, K-70 is available in the Kansas Return>Credits menu. Line A5 Instructions from Kansas booklet, many are the result of out of scope transactions. Bolded items may be in scope. LINE A5: Enter amounts for the following additions. • Federal Income Tax Refund. Generally, there will be no entry for this unless you amended your federal return for a prior year due to carry back of an investment credit or a net operating loss which resulted in you receiving a federal income tax refund in 2017 for that prior year. • Partnership, S Corporation or Fiduciary Adjustments . If you received income from a partnership, S corporation, joint venture, syndicate, estate or trust, enter your proportionate share of any required addition adjustments. The partnership, S Corporation, or trustee will provide you with the necessary information to determine these amounts. • Community Service Contribution Credit. Charitable contributions claimed on your federal return used to compute the community service contribution credit on Schedule K-60. • Learning Quest Education Savings Program (LQESP). Any “nonqualified withdrawal” from the LQESP. • Amortization – Energy Credits. Allowable amortization deduction claimed on the federal return relating to credit Schedule K-73, K-77, K-79, K-82, or K-83 and amounts claimed in determining federal AGI on carbon dioxide recapture, sequestration or utilization machinery and equipment, or waste heat utilization system property. • Ad Valorem or Property Taxes. Ad Valorem or property taxes paid by a nonresident of Kansas to a state or local government outside Kansas, when the law of such state does not allow a Kansas resident to claim a deduction of ad valorem or property taxes paid to a Kansas political subdivision in determining taxable income to the extent they are claimed as an itemized deduction for federal income tax purposes. • Abortion Expenses. Total amount of credit(s) allowed on your federal return that includes coverage of, reimbursement for, or credit/partial credit for, abortion or abortion expenses. Kansas STTC Training - TY2018

Kansas Exempt Interest Interest from – Kansas municipal bonds United States Savings Bonds Federal Thrift Savings Plan US Treasury Bills Farm Credit System (Federal Land Bank) Obligations of the state of Kansas or any Kansas political subdivision issued after 12/31/87 Board of Regents Bonds for Kansas colleges & universities Electrical Generation Revenue Bonds Industrial Revenue Bonds Kansas Highway Bonds Kansas Turnpike Authority Bonds Urban Renewal Bonds 2018 – See K40 Inst page17 Line A1 and Line A9 for list of exempt income Federal Land Bank is no more – became Farm Credit System Kansas STTC Training - TY2018

Kansas Exempt Interest The following are NOT exempt for Kansas Ordinary interest (bank, etc.) Federal National Mortgage Association FNMA; Fannie Mae Government National Mortgage Association GNMA; Ginnie Mae Federal Home Loan Mortgage Corporation FHLMC; Freddie Mac Kansas exempt interest is entered as part of the Federal income entries TaxSlayer makes the appropriate Schedule S entry 2017 Kansas STTC Training - TY2018

Kansas Public Employee’s Retirement System (KPERS) Contributions Pre-tax deduction from salary Not taxed by feds Taxed by Kansas Reported in W2 Box 14 May show as KRS, KPS, KPER, etc. Flows to Schedule S Line A2 2017 Kansas STTC Training - TY2018

Kansas Public Employee’s Retirement System (KPERS) Kansas Public Employee - working Contributes to KPERS (W2) Is NOT included in Federal AGI (not taxed) Is included in Kansas AGI (taxed) Kansas Public Employee - retired Gets pension from KPERS (1099R) Is included in Federal AGI (taxed) Is NOT included in Kansas AGI (not taxed) 2017 Contributions are mandatory under KPERS creation act in 1962. Kansas STTC Training - TY2018

Schedule S Subtractions Schedule S lines A7 through A17 are items that reduce Federal AGI in arriving at Kansas AGI. They are totaled and subtracted from the Additions total to arrive at a total adjustment, positive or negative, to Federal AGI. The circled line numbers are lines where TaxSlayer allows adjustments. Line A7 – TaxSlayer brings the amount from 1040 line 20b, taxable Social Security. When Federal AGI is over $75,000 TaxSlayer does not make an entry here and the 20b amount is included in Kansas AGI For Railroad Retirement Benefits this introduces an adjustment that will be make on line A11 For MFJ jointly, it may be beneficial to file MFS when one or both Federal AGIs can be reduced below $75,000 This is a very detailed and time consuming analysis and TaxSlayer does not provide assistance. Line A9 – TaxSlayer carries this information from the Federal Section > Income Line A15 – is a new subtraction for TY2018 Kansas STTC Training - TY2018

Kansas Return Subtractions From Income Line A8

Kansas Exempt Pensions – A11 Federal Gov’t and Military pensions CSA or CSF 1099R Office of Personnel Management 1099R Defense Finance and Accounting Service (DFAS) 1099R RR Retirement RRB-1099R And taxable portion of RRB-1099 when Federal AGI is over $75,000 Federal Thrift Savings Plan 1099R KPERS pensions 1099R from Kansas public institution/agency More See list in instructions 2017 Kansas STTC Training - TY2018

Kansas Exempt Pensions – A11 If you have doubts Ask taxpayer Review prior year return See instructions for Schedule S Line A11 2017 Kansas STTC Training - TY2018

Learning Quest Program – A13 Learning Quest Education Savings Program Kansas Qualified Tuition Program Other State Qualified Tuition Program Also known as a 529 Plan or QTP See IRS Pub 17 p 98; Pub 970 Chapter 8 (best info) TY2017 references “IRA” for education State program Prepay qualified student expenses Must designate student by name 2017 Kansas STTC Training - TY2018

Learning Quest Program – A13 Contributions State tax deductible Even if made to state other than Kansas Direct entry on TaxSlayer Subtractions from Income page Distributions reported on Form 1099-Q Not taxable if used for qualified expenses Tuition, fees Books, supplies, equipment Computers, internet access, related services Room and board Not reported on returns if used for qualified expenses 2017 Kansas STTC Training - TY2018

Learning Quest Program – A13 Contribution deduction limits Single, Married Filing Separate, Head of Household $3,000 per student, per year Married Filing Joint $6,000 per student, per year 2017 Kansas STTC Training - TY2018

Learning Quest Program – A13 Distributions used for non-qualified expenses are taxable by the state may be subject to state and federal penalties Taxable distributions are Out of Scope 2017 No tax is due on the distribution from a 529 unless the distribution exceeds the qualified costs. Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 ABLE Contributions– A15 Achieving a Better Life Experience (ABLE) account Established under a qualified ABLE program Kansas Other state, agency, or instrumentality Up to $3,000 ($6,000 MFJ) Per beneficiary Taxable distributions are Out of Scope 2017 Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 Other Subtractions – A16 See Line A16 Instructions for complete list Organ Donor Expenses Taxpayer, spouse, dependents on 1040 While alive Travel, lodging, medical expenses Not reimbursed Not claimed on 1040 Schedule A Max deduction = $5000 Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 Other Subtractions – A16 Kansas Venture Capital, Inc. Dividends Partnership, S Corporation, or Fiduciary Adjustments Business will provide information Native American Indian Reservation Income Requires all of these Native American Indian Residing on reservation Income earned on reservation Included in Federal AGI Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 Other Subtractions – A16 Gains from the sale of Kansas Turnpike bonds Electrical generation revenue bonds Gains included in Federal AGI Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 K-40 Deductions - Line 4 Standard Deduction on 1040 Must take Standard Deduction on the K-40 TaxSlayer will take Standard Deduction Itemized on 1040 Choice on K-40 TaxSlayer will chose better option Married Filing Separate Both must use same method See Instructions for K-40 Line 4 2017 Kansas STTC Training - TY2018

Schedule S – Part C Kansas Itemized Deductions 2017 No action is needed – TaxSlayer computes the amounts based on Federal Section entries Kansas STTC Training - TY2018

Itemized Deductions – Part C 2/5/2019 Deductions based on Federal Schedule A amounts 50% of medical and dental expenses 50% of real estate taxes 50% of personal property taxes 50% of qualified residence interest 100% of gifts to charity TaxSlayer will compute the deductions and transfer the result to Schedule S – Part C K-40 Line 4 Will change in TY2019 Kansas STTC Training - TY2018 49

Kansas STTC Training - TY2018 K-40 Credits TaxSlayer has pages for lines 13 and 15 entries Kansas STTC Training - TY2018

TaxSlayer Kansas Return Menu Kansas STTC Training - TY2018

Credit for Taxes Paid to Another State The amount of income tax paid to another state includes tax paid to that state and to any political subdivision. Kansas City, Missouri (KCMO) charges an earnings tax for anyone working in KCMO KCMO earnings tax can be included with taxes paid to Missouri 2017 Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 K-40 Overpayment TaxSlayer uses a page on the Kansas Return titled Donations for entering lines 36 through 42. The programs are described in the instructions for each line. Donations here reduce the refund or increase the amount due These are voluntary contributions Sometimes they are used to apply refunds of less than $5 since Kansas will not send a refund. Kansas STTC Training - TY2018

TaxSlayer Kansas Return Menu Kansas STTC Training - TY2018

K-40 Tax Computation, Use Tax, Balance Due TaxSlayer provides a page to enter amounts for the circled lines. Line 11 is out of scope Line 31 and 32 are not used because volunteers do not calculate penalty and interest on balance due – Kansas will do this Kansas STTC Training - TY2018

TaxSlayer Kansas Return Menu Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 Kansas Use Tax Amounts LINE 20 – Use tax due: If you made purchases of items from retailers located outside of Kansas on which no sales tax was paid (including freight, shipping or handling fees), complete line 20. If you are unsure as to the amount of tax due, use the following chart to estimate it for calendar year 2018. Estimated amounts from this chart do not supersede actual amount of use tax owed. If line 3, K-40 Use Tax $ 0 - $15,000 $ 6 $45,001 - $60,000 $44 $15,001 - $30,000 $19 $60,001 - $75,000 $57 $30,001 - $45,000 $32 $75,001 and over line 3 (KAGI) X .084% Kansas STTC Training - TY2018

Balance Due Amount You Owe – line 34 If taxpayer owes less than $5 No need to pay If taxpayer owes $5 or more – must pay Payment method selected in e-file section Direct debit (withdrawal) K-40V payment vouchers will print for check Mailing address at bottom of K-40 Page 1 2017 Kansas STTC Training - TY2018

Balance Due Underpayment – Line 30 Underpayment greater than $500 Interest and penalties may be imposed Inform taxpayer these may apply If so, Kansas Depart of Revenue will contact them Kansas Tax-Aide volunteers do not calculate 2017 Kansas STTC Training - TY2018

K-40 Withholding and Payments, Overpayment TaxSlayer Kansas Return Payments page allows entries for these two lines Line 24 is only applicable if the return is filed after the due date and a tax payment was made with the extension Line 36 is used to apply some or all of your refund to next years return A possible application of refunds less than 5 because Kansas will not sent a refund Kansas STTC Training - TY2018

TaxSlayer Kansas Return Menu Check the Kansas refund monitor before entering the amount to apply to 2018 taxes Kansas STTC Training - TY2018

Overpayment Credit Forward - Line 36 Apply some or all of the overpayment to next year’s tax Enter amount to apply Write amount on taxpayer’s envelope 2017 Kansas STTC Training - TY2018

Overpayment Refund – line 44 If less than $5 Kansas won’t pay Refund can be reduced to $0 Line 36 – Credit Forward, i.e. next year’s taxes Lines 37-43 – Donations If $5 or more Choose refund method in e-file section Direct deposit Check mailed to taxpayer 2017 Kansas STTC Training - TY2018

TaxSlayer Kansas Return Menu Complete the K-40ES to prepare vouchers for the taxpayer to mail Kansas estimated tax payments The decedent refund claim form RF-9 maybe needed to claim a Kansas income tax refund or one of the property tax refunds (K-40H, K-40PT). The form is printed and mailed in. A form may be needed for each refund. Kansas STTC Training - TY2018

Kansas Estimated Taxes Estimated Tax for following tax year Taxpayer owes > $500 in current tax year May need to pay estimated tax Taxpayer determines amount to be paid Up to four quarterly payments Sent in by mail TaxSlayer prepares payment vouchers 2017 Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 Deceased Taxpayer See Deceased Taxpayers on page 5 of the Kansas 2018 Individual Income Tax Instructions Notice $100 qualifications Kansas Form RF-9 Complete form in TaxSlayer Last item under “Miscellaneous Forms” Note: the form is not e-filed; must be mailed or faxed (785.296.8989) No other documents if MFJ and refund is $100 or less One more proof of death If refund is greater than $100 or other than surviving spouse Can be faxed in later (785.296.8989) Include name and SSN of deceased 2017 Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 Deceased Taxpayer Kansas STTC Training - TY2018

K-40 Tax Computation, Use Tax, Balance Due TaxSlayer will check the appropriate box based on Kansas Return > Amended Return entries 2017 form shown, 2018 is the same Kansas STTC Training - TY2018

TaxSlayer Kansas Return Menu TaxSlayer gives you instructions in the blue box. Kansas STTC Training - TY2018

TaxSlayer Kansas Return Menu Kansas STTC Training - TY2018

Kansas Amended Returns Do not amend a return until refund or payment clears Before starting amendment, print original return(s) if paper copy not available If you are not comfortable amending a return, discuss with the Local Coordinator 2017 Kansas STTC Training - TY2018

Kansas Amended Returns We can only amend for years certified New counselors – only TY 2018 If AGI changes, amendment may affect State(s) income tax Property tax refund Nonresident taxes and credit 2017 Kansas STTC Training - TY2018

Kansas STTC Training - TY2018 Now it’s YOUR turn… Questions? Comments? Concerns? Kansas STTC Training - TY2018