June 6, 2017 the Kansas Legislature overrode the Governor’s veto to pass SB 30 effective July 1, 2017. The Kansas law eliminates the Kansas tax exemption for “flow-through” business income retroactive to January 1, 2017, and increases the Kansas tax rates on individuals.
The former top individual Kansas tax rate was 4.6%. The new law raises the highest rate to 5.2% for 2017 and 5.7% for 2018 and thereafter.
The new law will phase in itemized deductions for medical expenses, home mortgage interest and real and personal property taxes to bring the deductions up to 100% of the Federal amount by 2020.
Kansas will not assess any penalties and interest arising from the underpayment of taxes due to the changes to the tax rates, as long as, the underpayment is rectified on or before April 17, 2018.