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 reducing their taxable income in Kansas. 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 the 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, aiming to align 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 contributions made to these accounts to the prior taxable year under certain conditions. Other notable changes address military bonuses, educational loan repayments for armed forces members, the exclusion of social security benefits for lower-income taxpayers, and the allowance of unreimbursed travel and medical expenses related to organ donations. The act will take effect upon publication in the statute book.

Statutes affected:
As introduced: 79-32