United States

Kansas DOR provides guidance in response to Wynne

Credit allowed for local income and earnings taxes paid


On Aug. 10, 2015, the Kansas Department of Revenue issued Notice 15-15, providing formal guidance regarding the state's policy in regard to the application of the personal income tax credit for income taxes paid to other states in the wake of the U.S. Supreme Court's ruling in Comptroller of the Treasury of Maryland v. Wynne, et ux.

Pursuant to Notice 15-15, a Kansas resident individual taxpayer may claim a credit for local income or earnings taxes paid to a locality that is a subdivision of a state other than Kansas. Such taxes will be treated in the same manner as income or earnings taxes paid to the state of which the locality is a subdivision.  Accordingly, in order to calculate the total credit for earnings taxes paid to a state and any localities within that state, the taxes paid to the localities must be added to the tax paid to the state as if the local tax amount is an additional state tax paid.  Credit limitations will be applied to this cumulative tax amount and not separately to the amount of tax paid to each state and locality.

Kansas resident individual taxpayers should review their income and earnings taxes paid to local jurisdictions for all open years in order to calculate the benefit of this change in prior years and going forward.  To the extent that refunds are available in prior years, taxpayers should consider filing refund claims.  To the extent that additional credit is being generated in the current year, taxpayers should consider whether to reduce estimated payments.

For more information on the Wynne case and its impact on state individual income taxes, read our tax alerts: US Supreme Court issues Wynne ruling and Maryland updates Wynne FAQ.


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