Don't HR Alone #16 - KS Income Tax, NV Minimum Wage, MI Interest Rates, and the ACA

Kansas legislature overrides veto, enacts income tax rate increase — KANSAS — Withholding and Reporting

The Kansas Legislature has overridden Gov. Sam Brownback’s veto of a bill that makes a number of changes to personal income taxes, including repealing the exemption for non-wage business income and increasing personal income tax rates.

Personal income tax rates. Under the legislation, personal income tax rates would be increased beginning in tax year 2017 by replacing the two-bracket system with a three-bracket system. For married individuals filing joint returns with taxable income above $60,000 and all other filers with taxable income above $30,000, a top bracket is created with a tax rate of 5.2% for tax year 2017 and 5.7% for tax year 2018 and all tax years thereafter. The bottom brackets are increased to 2.9% (previously, 2.6%) and 4.9% (previously, 4.6%) for tax year 2017 and further increased to 3.1% and 5.25% for tax year 2018 and all tax years thereafter. The legislation also repeals additional formulaic provisions that would have provided for rate reductions in certain future years based on growth in selected State General Fund tax receipts.

Business income exemption. Effective for tax year 2017, the legislation repeals the exemption for certain non-wage business income (income reported by pass-through entities and sole proprietorships on federal Schedules C, E, and F and lines 12, 17, and 18 on federal Form 1040) by eliminating the addback of certain business losses and the corresponding subtraction for specified business profits that the taxpayer reported for federal income tax purposes.