Is Social Security Taxable in Kansas?
Discover how Kansas tax law on Social Security benefits is tied to your federal return. A key income threshold determines your state tax liability.
The tax treatment of Social Security benefits varies significantly across the United States, with each state establishing its own regulations. For residents of Kansas, specific rules determine whether these retirement benefits are subject to state income tax. Understanding these state-level policies is important for proper tax filing and financial planning during retirement.
The Kansas Social Security Tax Exemption
Effective for tax years starting after December 31, 2023, Social Security benefits are fully exempt from Kansas income tax for all taxpayers. This recent change, signed into law on June 20, 2024, eliminates a previous income-based limitation. Prior to this law, the exemption was only available to taxpayers whose Federal Adjusted Gross Income (AGI) was $75,000 or less. Now, all Social Security income included in federal AGI can be subtracted on the Kansas return, irrespective of the taxpayer’s income level.
This change simplifies tax filing for many Kansas seniors. Federal Adjusted Gross Income, a figure calculated on your federal Form 1040, serves as the starting point for determining Kansas taxable income. Under the new law, if any portion of your Social Security is federally taxed and thus included in your federal AGI, you can now remove that same amount from your Kansas income.
Federal Taxability as the Baseline
Even with the new full exemption in Kansas, understanding the federal taxability of your benefits remains a necessary step. The amount you can subtract on your Kansas return is specifically the portion of your Social Security benefits that is considered taxable at the federal level. If your benefits are not taxed federally, they are not included in your federal AGI to begin with, and therefore no Kansas subtraction is necessary.
The federal government uses a specific formula based on what it calls “provisional income” or “combined income” to determine if benefits are taxable. This figure is calculated by taking your modified adjusted gross income, adding any nontaxable interest you received, and then adding 50% of your total Social Security benefits for the year. If this provisional income is below a certain threshold, your benefits are not taxed.
For those whose provisional income exceeds the base amounts, either 50% or up to 85% of their Social Security benefits can become subject to federal income tax. These federally established income tiers determine the taxable percentage.
How to Make the Kansas Subtraction Modification
To claim the full exemption on your Kansas income tax return, you must complete and file Kansas Schedule S, specifically Part A. This schedule is used to report various subtractions from your federal adjusted gross income to arrive at your Kansas adjusted gross income.
On Schedule S, you will find a specific line item under the “Subtractions from Federal Adjusted Gross Income” section designated for Social Security benefits. Here, you will enter the exact amount of your Social Security benefits that were subject to federal income tax. This figure can be found on your completed federal Form 1040.
Previously, taxpayers with a federal AGI over $75,000 were not permitted to make this subtraction and had to pay Kansas tax on their federally taxable benefits. The new legislation, effective for the 2024 tax year, removes this restriction entirely. Now, every taxpayer with federally taxable Social Security benefits, regardless of their income level, will use Schedule S to remove those benefits from their Kansas taxable income calculation.