The bill establishes an education opportunity tax credit for Kansas residents with dependent children eligible for public school but not enrolled. Starting in tax year 2025, taxpayers can claim a credit of $8,000 for each dependent child enrolled full-time in an accredited private school or $4,000 for those in non-accredited private schools, with a total cap of $125 million for the first year. Eligibility requirements include providing valid Social Security numbers for dependent children and disallowing claims for children who received scholarships under a separate program. The bill also outlines the administration of the tax credit, including the ability to claim it in advance, reporting requirements for the Department of Revenue, penalties for false claims, and the state’s burden of proof in legal challenges.

Additionally, the bill modifies the Kansas tax code regarding contributions and earnings from adoption savings accounts and first-time home buyer savings accounts. For taxable years beginning after December 31, 2024, individuals can contribute up to $6,000 to an adoption savings account, or $12,000 for married couples filing jointly, with tax benefits on the income earned. Contributions to a first-time home buyer savings account can also be applied to the prior taxable year, capped at $3,000 for individuals and $6,000 for couples. The bill repeals K.S.A. 2024 Supp. 79-32,117, indicating significant changes in tax modifications, and establishes provisions for federal net operating loss carrybacks and the taxation of state income tax refunds related to the education opportunity tax credit.

Statutes affected:
As Introduced: 79-32
As introduced: 79-32