The bill amends Kansas tax law to clarify modifications related to Kansas adjusted gross income, particularly focusing on business interest expenses and federal net operating loss carrybacks. It introduces technical changes to the statutory cross-reference concerning recaptured funds from adoption savings accounts, detailing permissible uses of these funds, conditions for recapture, and associated penalties. Notably, if an account holder dies without a designated beneficiary, the funds will be subject to recapture without penalty. The bill also outlines the taxation guidelines for adoption savings accounts, especially when distributions are not used for authorized expenses or do not meet the required holding period.

Additionally, the bill includes new legal language that allows for specific deductions and modifications to federal adjusted gross income for taxable years beginning after December 31, 2021. Key insertions include provisions for contributions to first-time home buyer savings accounts and adoption savings accounts, with defined limits for individuals and married couples. It also addresses the treatment of federal net operating losses, allowing carrybacks for losses incurred in specific years and extending the deadline for claims for refunds or amended returns until April 15, 2025. The bill repeals certain existing statutes, ensuring a streamlined approach to Kansas income taxation, and will take effect upon publication in the statute book. Overall, it aims to provide tax relief and clarity for Kansas taxpayers regarding various income sources and deductions.

Statutes affected:
As introduced: 38-2504, 79-32