Kansas Residents May Take Credit for City, County & School Income Taxes Paid
Author: Mary Reiser
The Kansas Department of Revenue has modified its interpretation of existing state law to allow Kansas residents a credit for taxes paid to cities, counties and school districts that impose an income tax. In the wake of the U.S. Supreme Court ruling in Comptroller of the Treasury of Maryland v. Wynne et ux., the department determined it was necessary to broaden its viewpoint on the creditable taxes since the Kansas statute specifically allows the credit for taxes paid to states and “political subdivisions.”
Kansas residents most likely to feel the positive impact of the expanded interpretation are those who work in Kansas City, Missouri, and pay Kansas City earnings tax. However, the credit also is available for the St. Louis earnings tax and the various city, county and school district income taxes imposed by local jurisdictions in 14 other states and the District of Columbia. Pursuant to department guidance, a resident individual taxpayer now will be allowed a credit for the cumulative tax liability paid to both state and local taxing jurisdictions.
The Kansas Department of Revenue is allowing taxpayers to file amended returns to claim credit for taxes paid to “political subdivisions” in light of the new interpretation. However, taxpayers only will be allowed to amend returns still open under the statute of limitations. In general, this time period will include returns filed for the 2012 to 2014 tax years as well as the 2011 tax year if the original return was extended.
To learn more about your opportunity in Kansas to claim credit for taxes paid to local jurisdictions, contact your BKD advisor.