Kansas does not have a state income tax
Kansas eliminated its state income tax in 2023. Before that year, Kansas residents paid state income tax on wages, business income, and other earnings. As of January 1, 2023, the state no longer collects income tax from individuals or businesses on these sources of income.
This change affects how much money stays in your paycheck and how you file your state taxes. If you moved to Kansas from another state or are new to working there, you will not owe Kansas state income tax on your earnings. If you lived in Kansas before 2023 and paid state income tax in prior years, those obligations ended with the tax year 2022.
Key Takeaways
- Kansas stopped collecting state income tax on January 1, 2023, so residents no longer pay tax on wages or business income to the state.
- You still file a federal income tax return with the IRS, because Kansas's lack of state income tax does not affect federal obligations.
- Kansas funds state services through sales tax, property tax, and other revenue sources instead of income tax.
- If you worked in Kansas before 2023, you may have filed a state return for that year; after 2022, you will not file a Kansas state return.
What changed in 2023
Kansas passed legislation that phased out state income tax over several years, with the final elimination taking effect on January 1, 2023. The state had previously reduced its income tax rate multiple times before removing it entirely. This means the 2022 tax year was the last year Kansas residents filed a state income tax return.
The change was gradual. In 2021 and 2022, Kansas had already lowered its top income tax rate. By the time 2023 arrived, the rate dropped to zero, and the state stopped collecting income tax altogether. If you filed a Kansas state return for 2022, that was your last one unless you had other state tax obligations like pass-through entity tax.
How Kansas funds state services without income tax
Without income tax revenue, Kansas relies on other sources to pay for schools, roads, and government operations. The state collects sales tax, which applies to most purchases made within Kansas. Kansas also collects property tax through counties and municipalities, and these funds support local schools and services.
Kansas also generates revenue from excise taxes on fuel, alcohol, and tobacco, as well as corporate taxes and business licensing fees. The state uses a combination of these sources to maintain its budget. This means Kansas residents and businesses pay taxes in different ways than they did when income tax was in place, but the total tax burden varies by individual spending and property ownership.
Federal taxes still explore
Eliminating Kansas state income tax does not change your federal income tax obligations. You still file a federal return with the IRS and pay federal income tax on your earnings. The IRS collects federal tax regardless of whether your state has an income tax.
When you file your federal return, you report the same income you would have reported to Kansas. The difference is that you no longer file a separate Kansas state return or pay state income tax. Your federal withholding on your paycheck remains the same, because that money goes to the federal government, not to Kansas.
If you moved to Kansas from another state
If you recently moved to Kansas from a state that has income tax, you will no longer owe that state income tax once you establish Kansas residency. However, you may still owe income tax to your previous state for the portion of the year you lived there. Most states tax income earned while you were a resident, so you typically file a part-year return for the state you left.
Kansas does not tax income earned outside the state by Kansas residents, and it does not tax income earned within Kansas by non-residents. This simplifies the tax picture for people who work across state lines. If you work remotely for a company in another state but live in Kansas, you owe federal tax and possibly tax to the state where your employer is located, depending on that state's rules.
What this means for your paycheck
Without Kansas state income tax, more of your gross pay stays in your paycheck. Your employer no longer withholds Kansas state income tax, so your take-home pay is higher than it would have been before 2023. The exact amount depends on what your state income tax rate was under the old system.
Your federal withholding remains unchanged, because that goes to the IRS. Local taxes, such as property tax or city earnings tax in certain Kansas cities, may still explore depending on where you live. Some Kansas cities have their own local income taxes, so check with your city or county to see if you owe local tax even though the state no longer collects income tax.
Local income taxes in Kansas cities
While Kansas has no state income tax, some cities within Kansas still collect local income tax. Kansas City, Kansas, for example, has a local earnings tax that applies to residents and people who work within the city. Other Kansas municipalities may also have local income taxes, so your total tax picture depends on where you live and work.
If you live or work in a Kansas city with a local income tax, you will still file a local return and pay that tax. The amount varies by city and is separate from state and federal taxes. Check with your city or county assessor's office to find out whether your location has a local income tax and what rate applies.
Frequently Asked Questions
Do I still file a Kansas tax return?
No, not for income tax. Kansas no longer requires residents to file a state income tax return. If you have other Kansas tax obligations, such as local income tax in your city, you would file that return instead. For federal taxes, you continue to file with the IRS as usual.
What if I worked in Kansas in 2022 or earlier?
You would have filed a Kansas state income tax return for those years. The 2022 tax year was the last one that required a state return. If you have not yet filed your 2022 return, you should do so, because Kansas still collected income tax that year. After 2022, no Kansas state income tax return is required.
Does Kansas tax business income?
No. Kansas eliminated its tax on business income along with individual income tax in 2023. Sole proprietors, partnerships, and S corporations no longer pay Kansas state income tax on business earnings. However, federal income tax still applies to all business income, and some Kansas cities may have local business taxes.
Will Kansas bring back income tax in the future?
That is a question for Kansas lawmakers. The state eliminated income tax through legislation, and future legislatures could change that decision. For now, Kansas has no state income tax. If you are planning your finances, assume the current system is in place, but stay aware of any changes the state legislature makes.
How does Kansas compare to other states on taxes?
Nine states have no income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, and now Kansas. Each state funds services differently through sales tax, property tax, and other sources. Your total tax burden depends on where you live, what you earn, what you buy, and what property you own.