Kansas Earned Income Tax Credit

Kansas is among 30 states (as well as Washington, D.C., Puerto Rico, and Guam) that offer their own versions of the federal Earned Income Tax Credit (EITC) for the tax year 2021.

Learn more about how the Kansas Earned Income Tax Credit works and whether you can qualify.

What Is the Kansas Earned Income Tax Credit?

A tax credit lowers the amount of tax you owe dollar-for-dollar. The Kansas Earned Income Tax Credit is a credit for low or mid-income Kansas residents. If you claimed the Earned Income Tax Credit on your federal income tax return, you can claim the Kansas EITC on your state return as well. The Kansas EITC is equal to 17% of the federal Earned Income Tax Credit.

Kansas's EITC dates back to 1998. It was expanded in 2007 and again in 2010, although the second increase was temporary.

The Kansas credit is refundable, as is the federal EITC. This means that if the amount of your credit is higher than the income tax you owe, the state will send you the difference as part of your tax refund.

Who Qualifies for the Kansas Earned Income Tax Credit?

All taxpayers who qualify for the federal Earned Income Tax Credit also qualify for the Kansas EITC. The qualifying rules are the same. You must:

• Have earned income from working for an employer or for yourself in your own business
• File a tax return
• Have a valid Social Security number
• Be a resident alien or U.S. citizen all year
• Claim the federal Earned Income Tax Credit on your federal return
• Be a Kansas resident

You cannot claim the Kansas EITC if you don't live in Kansas, even if you work there.

If you don't have a qualifying dependent, you can still claim the EITC if you:

• Meet all the other qualifying criteria
• Live in the United States for more than half the year
• Can't be claimed as a dependent on someone else's return
• Are at least 18 at the end of the tax year (December 31)
  

If you are married and filing a joint return, you and your spouse must both meet the age requirements. If you are married and filing a separate return, you must meet special rules laid out in the American Rescue Plan Act (ARPA) of 2021 to qualify for the EITC. Special, more lenient rules exist if you are disabled, in the military, or a clergy member. Check with a tax professional to find out whether you qualify if you fall into any of these categories.

You can also use the IRS EITC Assistant online for qualifying guidance.

What Are the Federal EITC Income Limits and Credit Amounts?

Income limits for the federal Earned Income Tax Credit depend on your filing status (single, head of household, or other) and your number of dependents. Income limits are based on your adjusted gross income (AGI), not your total income.

For the tax year 2021, the tax return that you file in 2022, these limits are:

Within your adjusted gross income, there is an additional $10,000 limit on investment income.

At 17% of the federal credit, the Kansas credit works out to about $1,017 for a married taxpayer with two qualifying children who files a joint tax return ($5,980 x 0.17 = $1,016.6, rounded up to $1,017). This tax credit is applied to the state income tax you owe as a Kansas resident. You would also receive the separate $5,980 tax credit for your federal income taxes, in addition to the $5,980 received from the IRS for the federal credit.

How Can I Claim the Kansas Earned Income Credit?

You can claim the Kansas EITC when you file your Kansas state income tax return. Page 8 of the instructions for Form K-40, the Kansas Individual Income Tax Return, has a section on the EITC. This includes a worksheet that walks you through how to find the exact amount of your state's Earned Income Tax Credit.

You'll need the amount of your federal Earned Income Tax Credit to complete the worksheet. Then, simply enter the amount on line 17 of your tax return when you're finished.

The Kansas Department of Revenue recommends filing your state return without claiming the credit if you're filing your Kansas return first and don't yet know the amount of your federal EITC. Pay any taxes that might be due at that time. Then, once you've filed your federal return and know the amount of your federal credit, you can file an amended Kansas tax return to claim the state credit.