Kansas State Tax Credits

More ways to save your hard-earned money from the tax man!

Kansas has some great State Tax Credits for you....

Thank you so much for checking our resource out here for your state and congratulations for taking a proactive step to paying less in taxes. For your state, we have identified the tax credits that are currently being offered to help you pay less in state taxes.

We hope this resource is helpful to you, and if there is something you feel we have missed, please let us know!

It would be completely arrogant of us to think that we know all things and if we missed something we want to know so we can vet that and help you and our other friends in the entrepreneurial community pay less in taxes! And if you found this helpful, you should check out our DIY resources inside of our Tax Savings Communities (found at www.MakeTaxesFair.com/Our-Communities).

We're also ready to help you if you want to skip the line of the DIY process and get help directly from us. To learn more about how we help our clients check out www.MakeTaxesFair.com/Get-My-Roadmap

 
Kanss

Kansas Tax Credit for Low-Income Student Scholarship Program

Overview:
This program incentivizes individuals, corporations, and financial institutions to contribute to approved Scholarship Granting Organizations (SGOs) by offering a 75% state income tax credit to support low-income K–12 students.

Who It’s For:
Kansas individual taxpayers, C corporations, privilege taxpayers (e.g., banks, financial institutions), and insurance companies looking to support education while reducing their state tax liability.

Four Key Highlights:

  1. 75% Kansas State Income Tax Credit for Donations

    • Contributors receive a 75% credit for donations made to designated SGOs.

    • Contributions support scholarships of up to $8,000 per student per year for tuition, fees, and school-related transportation.

  2. Flexible Contributor Eligibility

    • Open to individuals, corporations, privilege taxpayers, and insurance companies filing Kansas state tax returns.

    • Maximum annual contribution per taxpayer: $500,000.

  3. Credit Carryforward & Statewide Cap

    • Unused credits carry forward until fully used.

    • $10 million total statewide credit cap per year — first-come, first-served.

  4. Streamlined Claiming Process

    • Use Schedule K-70, available via the Kansas Department of Revenue.

    • Attach to your state income or privilege tax return to claim the credit.

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Kansas Angel Investor Tax Credit

Overview:
The Kansas Angel Investor Tax Credit encourages early-stage investment in qualified Kansas-based businesses by offering a state income tax credit of up to 50% of the investment to accredited investors.

Who It’s For:
Accredited investors (individuals or owners of permitted entities) making cash investments in certified Kansas businesses engaged in innovation and growth.

Four Key Highlights:

  1. Up to 50% Tax Credit for Early-Stage Investment

    • Investors can receive a 50% tax credit on investments in qualified securities of approved Kansas businesses.

    • Investments must be made after the business receives approval from the Kansas Department of Commerce.

  2. Annual & Per-Investor Credit Limits

    • Max $100,000 credit per Kansas business.

    • Max $350,000 credit per investor, per year.

    • Statewide program cap:

      • $7.5 million for 2025

      • $8 million for 2026

    • No new credits after 2026.

  3. Carryforward and Transferability

    • Unused credits can be carried forward indefinitely until used.

    • Credits can be transferred once if the investor has no Kansas tax liability.

    • Full amount must be transferred in one transaction.

  4. Eligibility & Restrictions

    • Qualified Kansas Business must be certified by the Department of Commerce before investment.

    • Investors who are officers, employees, vendors, or contractors of the business are not eligible.

    • Cash investments only qualify.

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Kansas Low-Income Housing Tax Credit (LIHTC)

Overview:
The LIHTC program provides a powerful incentive for private developers to build or rehabilitate affordable housing in Kansas. Through matched federal and state tax credits, developers offset the cost of maintaining units at restricted rents for low- to moderate-income tenants.

Who It’s For:
Real estate developers, housing authorities, and investors seeking to finance the construction or rehabilitation of affordable rental housing in Kansas, compliant with federal and state LIHTC requirements.

Four Key Highlights:

  1. Federal & State Credit Matching (KAHTC)

    • Kansas offers a state-level match to the federal LIHTC through the Kansas Affordable Housing Tax Credit (KAHTC).

    • KAHTC mirrors the federal credit dollar-for-dollar, up to 100% match, with a per-project cap of $8.5 million.

  2. Eligibility Based on Area Median Income (AMI)

    • Projects must set aside units for tenants with incomes based on AMI:

      • 40% of units at or below 60% AMI

      • 20% of units at or below 50% AMI

      • OR the income averaging option: up to 80% AMI if the average stays below 60% AMI.

    • Some deeper targeting tiers include units at 30%, 35%, or 40% AMI, especially with state-specific guidelines.

  3. Potential Sunset Alert – Apply Early

    • House Bill 2119 proposes ending KAHTC on July 1, 2025.

    • Existing credits remain valid, but no new KAHTC allocations will be approved after this date if the bill passes.

    • Developers must submit applications by:

      • May 23, 2025 (9% credits)

      • August 15, 2025 (4% credits)

  4. Long-Term Compliance Commitment

    • Projects must maintain affordability standards for 30 to 55 years.

    • Owners must conduct annual income certifications, adhere to rent limits, and undergo state/federal inspections.

    • Rent increases must follow HUD income guidelines and include all mandatory fees in gross rent calculations.

 

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Community Service Program (CSP) Tax Credit

Overview:
The Community Service Program (CSP) Tax Credit enables Kansas nonprofits and public health entities to raise funds for approved community development projects by offering significant state income tax credits to donors. Depending on location, organizations can provide 50% or 70% tax credits, making it a compelling fundraising incentive for charitable contributions.

Who It’s For:
Kansas-based nonprofit organizations and foundations working on projects related to community services, youth training, crime prevention, or healthcare—particularly those seeking to leverage donor support through state tax credits.

Four Key Highlights:

  1. Rural vs. Urban Credit Rates:
    Organizations in communities with fewer than 15,000 residents can offer donors a 70% tax credit, while those in more populated areas offer 50%.

  2. Eligible Project Categories:
    Projects must focus on qualifying areas like childcare, healthcare access, crime prevention, or youth apprenticeships and technical training.

  3. Funding Caps & Application Window:
    The program offers $4.13 million in total credits for 2025, with a $200,000 maximum per project. Applications are accepted from March 1 to April 30, 2025.

  4. Evaluation & Compliance Requirements:
    Selection is competitive and based on factors like community need, innovation, and donor support. A $250 application fee and detailed fundraising plan are required.

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Kansas Research and Development (R&D) Tax Credit

Overview:
The Kansas R&D Tax Credit supports innovation by allowing businesses to claim a tax credit for qualified research and development expenses conducted within the state. The program offers a percentage-based credit and includes a transferability option for businesses without immediate tax liability.

Who It’s For:
Kansas-based businesses or taxpayers incurring qualified research expenses as defined by the Internal Revenue Code and seeking to reduce their state tax burden or leverage credits via transfer.

Four Key Highlights:

  1. Credit Percentage Increases After 2022

    • For tax years prior to 2023, the credit equals 6.5% of the increase in qualified R&D expenses.

    • Starting in 2023, that percentage increases to 10%.

  2. 25% Annual Usage Cap

    • Businesses can only use 25% of their total earned credit (plus any carryforwards) in a single tax year, ensuring multi-year benefit potential.

  3. Credit Is Transferable (Post-2022)

    • Unused credits can be transferred (one-time, full amount only) to another taxpayer starting in 2023. The transferee inherits carryforward rights and usage restrictions.

  4. Filing Requires Kansas Schedule K-53

    • To claim the credit, taxpayers must submit Schedule K-53 with their income tax return. Transfers require Form K-260. Credits can be carried forward in 25% portions until fully applied.

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