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Kansas Retirement Tax Friendliness

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Overview of Kansas Retirement Tax Friendliness

Kansas exempts all Social Security income for seniors with Adjusted Gross Income (AGI) below $75,000. Public pension income is also exempt but other forms of retirement income are not. Property taxes and sales taxes in the state are close to average. Kansas does not have an estate or inheritance tax.

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You will pay of Kansas state taxes on your pre-tax income of
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Quick Guide to Retirement Income Taxes
is toward retirees.
Social security income is taxed.
Withdrawals from retirement accounts are taxed.
Wages are taxed at normal rates, your marginal state tax rate is %.
Public pension income is taxed, private pension income is taxed.
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    Jennifer Mansfield, CPA Tax

    Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.

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Kansas Retirement Taxes

Photo credit: ©iStock.com/omersukrugoksu

Planning for a Kansas retirement? As compared with other states, Kansas is moderately tax-friendly for retirees. It has a number of benefits that help seniors keep their tax bill low, like the Social Security exemption and the SAFE SENIOR property tax deduction.

On the other hand, there are no such exemptions or deductions for other common forms of retirement income, including income from a 401(k) or an IRA. To help you decide if a Kansas retirement is the right choice for you, we’ve answered common questions about Kansas retirement taxes.

Is Kansas tax-friendly for retirees?

Kansas is moderately tax-friendly for retirees. It exempts all Social Security income for seniors with Adjusted Gross Income (AGI) below $75,000. Public pension income is also exempt but other forms of retirement income are not. Property taxes and sales taxes in the state are close to average. The state does not have an estate or inheritance tax.

Is Social Security taxable in Kansas?

Yes, but only for taxpayers with Adjusted Gross Income (AGI) over $75,000. Taxpayers (married or single) whose AGI exceeds that limit pay full Kansas state income taxes on Social Security. AGI includes income from work, interest income and all other forms of retirement income.

Are other forms of retirement income taxable in Kansas?

Yes. Retirement income from a 401(k), a pension or an IRA is fully taxable at the Kansas tax rates of 2.7% and 4.8% (the table below shows brackets for these rates). One exception is public pension income, whether from federal, state or local government pension. Public pension income is fully exempt from the Kansas income tax.

2017 Income Tax Brackets

Single Filers
Kansas Taxable IncomeRate
$0 - $15,0002.9%
$15,000 - $30,0004.90%
$30,000+5.20%
Married, Filing Jointly
Kansas Taxable IncomeRate
$0 - $30,0002.9%
$30,000 - $60,0004.90%
$60,000+5.20%
Married, Filing Separately
Kansas Taxable IncomeRate
$0 - $15,0002.9%
$15,000 - $30,0004.90%
$30,000+5.20%
Head of Household
Kansas Taxable IncomeRate
$0 - $15,0002.9%
$15,000 - $30,0004.90%
$30,000+5.20%

2018 Income Tax Brackets

Single Filers
Kansas Taxable IncomeRate
$0 - $15,0003.1%
$15,000 - $30,0005.25%
$30,000+5.70%
Married, Filing Jointly
Kansas Taxable IncomeRate
$0 - $30,0003.1%
$30,000 - $60,0005.25%
$60,000+5.70%
Married, Filing Separately
Kansas Taxable IncomeRate
$0 - $15,0003.1%
$15,000 - $30,0005.25%
$30,000+5.70%
Head of Household
Kansas Taxable IncomeRate
$0 - $15,0003.1%
$15,000 - $30,0005.25%
$30,000+5.70%

How high are property taxes in Kansas?

The average effective property tax rate in Kansas is 1.4%, which ranks as the 15th highest in the U.S. However, when taking into account the relatively low property values in Kansas, taxes paid are not especially high. The typical Kansas homeowner pays less than $2,000 annually in property taxes. That is one reason the average cost of housing in Kansas is 17.9% lower than the national average.

What is the Kansas homestead refund?

Seniors who own and live in their home in Kansas may be eligible for a number of tax relief programs. The most common is the homestead refund. This is available to homeowners who are over 55 years old as of January 1 of the year of application and have total household income of $33,400 or less. The refund is worth up to $700 dollars.

The SAFE SENIOR program, also called Kansas Property Tax Relief for Low Income Seniors, refunds 75% of all property taxes paid. It is available to homeowners who are at least 65 years old for the entirety of the year and who have total household income of $18,900 or less.

Photo credit: ©iStock.com/tomofbluesprings

How high are sales taxes in Kansas?

Sales taxes in Kansas are fairly high. The average rate, including the statewide rate of 6.15% and the average of all city and county rates, is 8.2%. That ranks among the ten highest in the country. In many cities the rate is over 9%.

Seniors should also note that Kansas taxes groceries at the full sales tax rate, one of just a handful of states to do so. However, households with adjusted gross income less than $30,165 can claim the Food Sales Tax Credit. The credit is $125 for every state tax exemption claimed.

What other Kansas taxes should I be concerned about?

Seniors who are relying on investment income should be aware that capital gains are taxed as regular income in Kansas. Long-term and short-term gains from investments including real estate or stocks are subject to the state income tax rates.

Kansas does not have an estate or inheritance tax.

Most Tax Friendly Places for Retirees

SmartAsset’s interactive map highlights the places in the country with tax policies that are most favorable to retirees. Zoom between states and the national map to see the most tax-friendly places in each area of the country.

Highest
Lowest
Rank City Income Tax Paid Property Tax Rate Sales Tax Paid Fuel Tax Paid Social Security Taxed?

Methodology Our study aims to find the areas with the most tax-friendly policies for retirees. To do that we looked at how the tax policies of each city would impact a retiree with a $50,000 income. Our hypothetical retiree is getting $15,000 from Social Security benefits, $10,000 from a private pension, $15,000 from retirement savings like a 401(k) or IRA and $10,000 in wages.

To calculate the expected income tax this person would pay in each location we applied deductions and exemptions. This included the standard deduction, personal exemption and deductions for each specific type of retirement income. We then calculated how much this person would pay in income tax at the federal, state, county and local levels.

We calculated the effective property tax rate by dividing median property tax paid by median home value for each city.

In order to determine sales tax burden we estimated that 35% of take-home (after-tax) pay is spent on taxable goods. We multiplied the average sales tax rate for a city by the household income less income tax. This product is then multiplied by 35% to estimate the sales tax paid.

For fuel taxes, we first distributed statewide vehicle miles traveled down to the city level using the number of vehicles in each county. We then calculated miles driven per capita in each city. Using the nationwide average fuel economy, we calculated the average gallons of gas used per capita in each city and multiplied that by the fuel tax.

For each city we determined whether or not Social Security income was taxable.

Finally, we created an overall index weighted to best capture the taxes that most affect retirees. We gave a 4x weighting to income tax, 3x weighting to property tax rate, a 2x weighting to sales tax and 1x weighting to fuel tax.

Sources: Internal Revenue Service, Social Security Administration, state websites, local government websites, US Census Bureau 2016 American Community Survey, Avalara, American Petroleum Institute, GasBuddy, UMTRI, Federal Highway Administration