The bill amends Kansas income tax laws, specifically addressing Kansas adjusted gross income and clarifying modifications related to business interest expenses and federal net operating loss carrybacks. It introduces technical changes to the statutory cross-reference for recaptured funds associated with adoption savings accounts, detailing permissible uses of these funds, conditions for recapture, and penalties for early withdrawals. Notably, it specifies that no penalties will apply if the account holder dies without a designated beneficiary. Additionally, the bill clarifies the components that must be added to or subtracted from federal adjusted gross income for Kansas tax purposes, particularly concerning business interest expenses and federal net operating loss deductions.

Moreover, the bill proposes new provisions for first-time home buyer savings accounts, allowing contributions of up to $3,000 for individuals and $6,000 for married couples, with the option to apply early contributions to the previous tax year. It also permits the deduction of income received from these accounts and addresses federal tax credits by allowing taxpayers to claim a portion of the federal employee retention credit disallowance for certain taxable years, with a filing deadline of April 15, 2025. The bill repeals existing statutes K.S.A. 2024 Supp. 38-2504 and 79-32,117, indicating a significant restructuring of the tax code, while aiming to provide tax relief and clarity for Kansas taxpayers in compliance with federal regulations.

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