KANSAS LEGISLATURE | Here’s who qualifies for new tax cuts
By JIM SULLINGER
The Star’s Topeka correspondent

TOPEKA | The Kansas Legislature approved tax cuts for senior citizens and low-income taxpayers before adjourning last week.

Here are questions and answers about the reductions and eligibility.

SOCIAL SECURITY EXEMPTION
Q: Will my Social Security income be exempt from state income tax?
A: That depends on how much income, including Social Security income, you declare on your federal tax return.

If your federal adjusted gross income is less than $50,000 for tax year 2007, then you can exempt Social Security from your state taxable income. If it’s more than $50,000, you’re out of luck for this tax year. However, that threshold increases to $75,000 in tax year 2008.

Q: If I qualify, can I exempt every dime of the Social Security I received in the current tax year?
A: No. You can only exempt the amount allowed to be declared as income on your federal return, which is a percentage of your Social Security payments up to a maximum of 85 percent.

Q: Can I claim this Social Security exemption for tax year 2006?
A: No.

EARNED INCOME TAX CREDIT
Q: How do I determine whether I qualify?
A: This credit is for the working poor who can claim the refund even if they don’t owe any tax. You must first get a federal income tax form and figure out, based on several different factors, whether you qualify for the federal earned income credit refund. There must be at least one child living with you and your annual earning must be less than $37,783 or $39,783 for a married couple filing jointly.

If you have no children living with you and you earned less than $12,590 or $14,590 for a married couple filing jointly, then you can claim the credit.

A chart on pages 53 to 59 on the federal 1040 instruction form will determine yourrefund.

For example, a couple filing jointly with two children and an income of $26,001 would be eligible for a refund in tax year 2006 of $2,595.

Q: How do I determine the state earned income tax credit?
A: The state refund will be based on 17 percent of the federal refund claimed by an eligible taxpayer. In the example above, the couple with the $2,595 federal refund would be entitled for a state refund of $441.

Q: Can I claim the 17 percent refund for tax year 2006?
A: No.

HOMESTEAD PROPERTY TAX REFUND

Q: How do I determine whether I qualify for a partial refund on the real estate tax paid on my home?
A: First, obtain a Kansas homestead claim booklet from any library. You must be 55 or older, blind or disabled or have a child under 18 living with you. If your income is more than $28,000, then you can’t claim the refund.

Q: Can Social Security payments for this year be subtracted from my annual income?
A: Yes, but only 50 percent.

Q: How do I determine how much of a refund I will get?
A: Once you have determined your income level, including the Social Security deduction, then a chart in the booklet will tell you the percentage to use in calculating the refund.

For example, a couple has $30,000 of annual income and $12,000 of that is Social Security. This year, they can show an income of $24,000 and can claim a $105 refund, or 15 percent of the maximum refund of $700. Of course, that assumes their real estate tax bill was greater than $700. A: Tax payments on homes for this year won’t be due until Dec. 20. The refund claim form needs to be filed before April 15 of next year for a refund on this year’s property tax bill. The new legislation won’t apply to a refund sought for last year’s property tax payment.