Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 adam.c.proffitt@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Adam Proffitt, Director Laura Kelly, Governor


March 6, 2023


The Honorable Caryn Tyson, Chairperson
Senate Committee on Assessment and Taxation
300 SW 10th Avenue, Room 548-S
Topeka, Kansas 66612
Dear Senator Tyson:
SUBJECT: Fiscal Note for SB 264 by Senate Committee on Assessment and Taxation
In accordance with KSA 75-3715a, the following fiscal note concerning SB 264 is
respectfully submitted to your committee.
Under current law, the non-refundable income tax credit for expenses for household and
dependent care services necessary for gainful employment (more commonly referred to as the
Child and Dependent Care Tax Credit) is set at 25.0 percent of the credit claimed against the
taxpayer’s federal income tax liability under Section 21 of the federal Internal Revenue Code in
tax year 2023 and in all future tax years. SB 264 would set the tax credit at 50.0 percent in tax
year 2023 and in all future tax years.

Estimated State Fiscal Effect
FY 2023 FY 2023 FY 2024 FY 2024
SGF All Funds SGF All Funds
Revenue -- -- ($6,000,000) ($6,000,000)
Expenditure -- -- $29,095 $29,095
FTE Pos. -- -- -- --
The Department of Revenue estimates that SB 264 would decrease State General Fund
revenues by $6.0 million in FY 2024, FY 2025, and FY 2026. To formulate these estimates, the
Department of Revenue reviewed recent data from the Internal Revenue Service on the amount of
federal Child and Dependent Care Tax Credits that were claimed by individual income taxpayers.
The Department indicates that approximately $6.0 million in tax credits would be claimed by
individual taxpayers in tax year 2023 under current law that allows taxpayers to claim 25.0 percent
The Honorable Caryn Tyson, Chairperson
Page 2—SB 264

of the federal credit. Allowing taxpayers to receive 50.0 percent of the federal credit in tax year
2023, would allow taxpayers to claim an additional $6.0 million or a total of $12.0 million in tax
credits in tax year 2023 or FY 2024.
The Department indicates that the bill would require $29,095 from the State General Fund
in FY 2024 to implement the bill and to modify the automated tax system. The required
programming for this bill by itself would be performed by existing staff of the Department of
Revenue. In addition, if the combined effect of implementing this bill and other enacted legislation
exceeds the Department’s programming resources, or if the time for implementing the changes is
too short, additional expenditures for outside contract programmer services beyond the
Department’s current budget may be required. Any fiscal effect associated with SB 264 is not
reflected in The FY 2024 Governor’s Budget Report.


Sincerely,

Adam Proffitt
Director of the Budget

cc: Lynn Robinson, Department of Revenue


Statutes affected:
As introduced: 79-32