Registering a Business in Kansas
You may need to register your business with the Kansas Secretary of State. Some taxpayers will also need to register with the Kansas Department of Revenue. Kansas has a business portal which owners can use to see their specific requirements. The portal can be found here.
S-Corporation Income Tax
Kansas recognizes the federal S-election, and Kansas S corporations are not required to pay tax to the state. However, individual S corporation shareholders will owe tax on their share of the corporation’s income. S corporations must file Form K-120S.
LLC/Partnership Income Tax
LLCs and partnerships are not required to pay income tax to Kansas. Instead, income from the business is distributed to individual LLC members or partners, who then pay Kansas income tax on that amount with their personal return. Partnerships must file Form K-120S.
Any partnership or S corporation required to file a Kansas income tax return may elect to file a composite income tax return for its nonresident partners or nonresident shareholders that derive
income from the partnership or S corporation. Any nonresident partner or nonresident shareholder may be included in a composite return unless the partner or shareholder has income from a Kansas source other than the partnership or S corporation. Businesses that elect to file composite returns use Schedule K-40C.
Individual Income Tax
Kansas generally conforms to the Internal Revenue Code on a rolling basis, and therefore it adopts most federal provisions, unless otherwise modified. The starting point for computing Kansas's personal income tax liability is the federal AGI.
They offer a state defined standard deduction which is based on your filing status and allows an itemized deduction but only if you itemized on your federal return.
The itemized deduction is similar to the federal itemized deduction but with a few minor changes.
Although personal exemptions were eliminated on the federal level starting in 2018, Kansas maintained the state's existing personal and dependent exemption amounts.
For 2020, the personal and dependent exemption amount is $2,250 for each applicable individual. They do not conform to the Internal Revenue Code (IRC) section 199A, also known as the QBI deduction.
Individual income tax rates vary by filing status and income and are as follows:
The K-120S and K-40 are due on the 15th day of the fourth month following the close of the tax year. For calendar filers, the due date will be April 15th. If the due date falls on a weekend or holiday, the due date is extended to the next business day.
Businesses are required to make estimated tax payments for the taxable year if its Kansas income tax liability can reasonably be expected to exceed $500. Form K-120ES is used for businesses to make estimated payments.
Individuals who can reasonably expect to owe more than $500 will need to make estimated quarterly payments on Form K-40V.
Filing an Extension
Businesses who need an extension of time to file will need to include a copy of their federal form 7004 when they file their K-120S. Including a copy of form 7004 will automatically allow the business a 6 month extension of time to file their return.
Individuals who need an extension of time to file will need to include a copy of their federal form 4868 with their completed K-40.
Late filing Penalty will be computed at the rate of 1 percent per month on the balance due with a maximum penalty not to exceed 24 percent
If your business was formed or is located in another state, but generates income in Kansas, it may be subject to Kansas taxes. The rules for taxation of multistate businesses, including what constitutes nexus with a state for the purpose of various taxes, are complicated. If you run such a business, you should consult with a tax professional.
Kansas Secretary of State :
Kansas Department of Revenue: