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 modification allows individuals to subtract these qualified tips from their federal adjusted gross income, thereby adjusting their Kansas adjusted gross income calculation. In addition to this new exemption, the bill repeals the existing section of K.S.A. 79-32,117, indicating a significant overhaul of the income tax provisions related to Kansas adjusted gross income. The changes aim to clarify the tax treatment of various income sources and deductions, ensuring taxpayers can accurately calculate their state income tax obligations.

Moreover, the bill includes several other modifications to the Kansas tax code, such as excluding certain income or loss reported on Schedule E of the federal individual income tax return for specific taxable years, and allowing deductions for contributions to family postsecondary education savings accounts and ABLE accounts, with limits set at $3,000 for individuals and $6,000 for married couples filing jointly. It also addresses the treatment of military bonuses, social security benefits, and retirement benefits from specific university plans, as well as net gains from the sale of livestock and contributions to first-time home buyer savings accounts. Overall, the bill seeks to provide tax relief for individuals receiving qualified tips while streamlining the income tax calculation process in Kansas.

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