Does Kansas Tax Social Security Benefits?
Learn how Kansas state income tax applies to Social Security benefits. The state's tax treatment is based on your federal Adjusted Gross Income.
Kansas has specific regulations for taxing Social Security income, which differ from federal guidelines. Understanding the interplay between federal and state tax law is necessary for Kansas taxpayers who receive these benefits, as the state’s approach has changed recently.
Federal Taxation of Social Security Benefits
The federal government may tax a portion of your Social Security benefits, but this depends on your income level. The calculation hinges on a figure called “combined income.” To determine your combined income, you take your adjusted gross income (AGI), add any nontaxable interest you received, and then add one-half of your total Social Security benefits for the year.
Once you have calculated your combined income, you compare it to thresholds set by the IRS:
- For individuals with a combined income between $25,000 and $34,000, up to 50% of benefits may be taxed.
- For individuals with a combined income over $34,000, up to 85% of benefits may be taxed.
- For those married filing jointly with a combined income between $32,000 and $44,000, up to 50% of benefits may be taxed.
- For those married filing jointly with a combined income over $44,000, up to 85% of benefits may be taxed.
The amount of Social Security benefits included in your taxable income is the lesser of either the taxable percentage (50% or 85%) of your benefits or the same percentage of the amount your combined income exceeds the threshold. This calculation determines the “federally taxable amount” of your Social Security.
The Kansas Social Security Tax Exemption
Effective with the 2024 tax year, all Social Security benefits included in federal adjusted gross income are exempt from Kansas income tax. This exemption applies to all taxpayers, regardless of their income level. This change, enacted in 2024, simplified the state’s tax rules and eliminated a previous income-based threshold.
Reporting the Exemption on Your Kansas Return
To claim the Social Security tax exemption in Kansas, you must report it as a subtraction modification on your state income tax return. This is done on Schedule S, titled “Subtractions from Federal Adjusted Gross Income.” This form is a required attachment to the Kansas individual income tax return, Form K-40, for anyone claiming specific subtractions not automatically included in the Kansas tax calculation.
When completing your Kansas return, you will identify the specific line on Part A of Schedule S designated for Social Security benefits. On this line, you will enter the amount of your Social Security benefits that were subject to tax at the federal level. By listing this federally taxable amount as a subtraction, you effectively remove it from your Kansas taxable income, ensuring it is not taxed by the state.
It is important to enter the correct figure from your federal return, which is the portion of your benefits that was actually included in your federal AGI. You do not subtract your total Social Security received, only the taxable part. The Kansas Department of Revenue provides instructions for Schedule S that specify where to find this amount on your federal Form 1040.