The bill amends K.S.A. 2024 Supp. 79-32,117 to introduce a subtraction modification for certain qualified tips, exempting them from state income tax. This change allows individuals to subtract these qualified tips from their federal adjusted gross income, thereby adjusting the Kansas adjusted gross income calculation. The bill also repeals the existing section of K.S.A. 79-32,117, indicating a significant update to the state's income tax regulations. In addition to this new exemption, the bill outlines various modifications to the calculation of Kansas adjusted gross income, including specific additions and subtractions related to interest income, federal tax refunds, and various deductions, with the intent of aligning state tax calculations more closely with federal guidelines.

Furthermore, the bill introduces several modifications to the Kansas tax code regarding the treatment of various income sources and deductions for taxable years beginning after December 31, 2012. Key provisions include the exclusion of certain income or loss reported on Schedule E from federal adjusted gross income, tax benefits for contributions to family postsecondary education savings accounts and ABLE accounts, and the option for taxpayers to apply early-year contributions to the prior taxable year. The bill also addresses tax modifications for armed forces members, social security benefits, and retirement benefits from specific university plans, while including provisions for unreimbursed travel and medical expenses related to organ donation, as well as the treatment of net gains from the sale of livestock and Christmas trees. The bill will take effect upon publication in the statute book.

Statutes affected:
As introduced: 79-32