Overview

Update the Kansas individual income tax model for tax year 2025 based on the official 2025 Kansas Individual Income Tax Booklet (ip25.pdf).

Key Changes for 2025

1. Parameter Updates Requiring New Values

2. Parameters Requiring 2025 References (Values Unchanged)

All parameters below need updated references to https://www.ksrevenue.gov/pdf/ip25.pdf with appropriate page numbers:

Tax Rates

• rates/joint.yaml - 5.2%/5.58% brackets (ip25.pdf page 34)
• rates/other.yaml - 5.2%/5.58% brackets (ip25.pdf page 34)
• rates/zero_tax_threshold.yaml - Filing requirement thresholds (ip25.pdf page 3)

Standard Deductions (ip25.pdf page 2)

• deductions/standard/base_amount.yaml
  • Single: $3,605
  • MFJ: $8,240
  • HOH: $6,180
  • MFS: $4,120
  • Surviving Spouse: $8,240
• deductions/standard/extra_amount.yaml - Elderly/blind amounts ($850/$700)

Exemptions (ip25.pdf page 2, 6)

• exemptions/by_filing_status/amount.yaml - $18,320 (MFJ), $9,160 (others)
• exemptions/by_filing_status/dependent.yaml - $2,320 per dependent
• exemptions/by_filing_status/hoh_additional_amount.yaml - $2,320
• exemptions/by_filing_status/in_effect.yaml
• exemptions/consolidated/amount.yaml - (pre-2024 structure, discontinued)
• exemptions/base.yaml - (pre-2024 structure, discontinued)

Credits (ip25.pdf page 8)

• credits/eitc_fraction.yaml - 17% of federal EITC
• credits/cdcc_fraction.yaml - 50% of federal CDCC
• credits/nonrefundable_before_eitc.yaml
• credits/nonrefundable_after_eitc.yaml
• credits/refundable.yaml

Income Subtractions (ip25.pdf page 12)

• agi/subtractions/oasdi/agi_limit.yaml - Social Security (unlimited for 2024+)

3. Food Sales Tax Credit - SUNSET After 2024

The food sales tax credit sunsets after tax year 2024 per HB 2106 (state food sales tax reduced to 0% on 1/1/2025).

Files to update:

• credits/food_sales_tax/amount.yaml - Add 2025-01-01: 0
• credits/food_sales_tax/agi_limit.yaml - Add sunset date
• credits/food_sales_tax/child_age.yaml - Add sunset date
• credits/food_sales_tax/min_adult_age.yaml - Add sunset date
• ks_fstc.py - Update logic to return 0 for 2025+

4. New Programs to Model

A. Pregnancy Resource Act Credit (K-94) - Priority: High

New for tax years 2024+ - K.S.A. 79-32,309

• Credit: 70% of contributions to eligible charitable organizations
• Caps: $5M per organization, $10M statewide annually
• Carryforward: Up to 5 years
• Implementation: Can use existing charitable_cash_donations variable

Files to create:

• parameters/gov/states/ks/tax/income/credits/pregnancy_resource_act/rate.yaml
• parameters/gov/states/ks/tax/income/credits/pregnancy_resource_act/cap.yaml
• variables/gov/states/ks/tax/income/credits/ks_pregnancy_resource_act_credit.py
• Tests in tests/policy/baseline/gov/states/ks/tax/income/ks_pregnancy_resource_act_credit.yaml

B. Workforce Retention Credit (K-93) - Priority: Low

New for tax years 2024-2028 - K.S.A. 74-32,286

• Credit: $1,500 one-time
• Eligibility: Adult Learner Grant recipients who graduate and work in KS for 2+ years
• Carryforward: 1 year only
• Note: Difficult to model - requires knowing Adult Learner Grant receipt status (not a typical tax variable)

C. Additional AGI Subtractions - Priority: Medium

Currently not modeled subtractions from Schedule S (ip25.pdf page 11-13):

• Learning Quest 529 Subtraction: Up to $6,000 (MFJ) or $3,000 (others) - K.S.A. 79-32,117(c)(xiv)
• Adoption Savings Account Subtraction: Up to $12,000 (MFJ) or $6,000 (others) - K.S.A. 79-32,117(c)(xxiv)
• First-Time Home Buyer Savings Subtraction: Up to $6,000 (MFJ) or $3,000 (others) - K.S.A. 79-32,117(c)(xxv)
• KPERS/Teacher Retirement Subtraction: Full exclusion - K.S.A. 79-32,117(c)(iii)
• Military Pension Subtraction: Full exclusion - K.S.A. 79-32,117(c)(iv)

D. Additional Exemptions - Priority: Medium

• Child born in tax year: $2,320 additional exemption (ip25.pdf page 6)
• Stillbirth exemption: $2,320 (new provision) (ip25.pdf page 6)

5. Tests to Add

Create 2025-specific integration tests verifying:

• Tax calculation for all filing statuses with 2025 values
• Disabled veteran exemption at new $2,320 amount
• Food sales tax credit returns $0 for 2025
• Zero-tax threshold calculations
• EITC and CDCC at correct percentages

6. Reference Documents

Implementation Checklist

• Update disabled veteran exemption to $2,320 for 2025
• Add 2025 references (ip25.pdf) to all parameter files
• Implement food sales tax credit sunset (return 0 for 2025+)
• Implement Pregnancy Resource Act Credit (K-94)
• Add 2025 integration tests
• (Optional) Implement 529/Adoption/First-Time Homebuyer subtractions
• (Optional) Implement child-born-in-year and stillbirth exemptions
• Run make format and make test