Tool | November 2018

State-by-State Guide to Taxes on Retirees

Kansas

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The Bottom Line
Map of Kansas

Least Tax-Friendly

Faced with a ballooning budget deficit, lawmakers in Kansas boosted taxes in 2018, making the state even less friendly for retirees. Distributions from individual retirement accounts, 401(k) plans and out-of-state pensions are fully taxed. Kansas excludes Social Security benefits from state income taxes for residents with a federal adjusted gross income of $75,000 or less, but those with a higher AGI will pay taxes on those benefits, too.

With high sales taxes and property taxes above average, the Sunflower State is one of Kiplinger’s least-friendly states for retirees.

State Sales Tax

6.5% state levy. Localities can add as much as 4%, and the average combined rate is 8.68%, according to the Tax Foundation. These rates apply to groceries as well. Starting in 2020, sales tax on food could be lowered to 2%. A food sales tax credit of $125 per person is available to seniors and those claiming dependents; income limitations apply.

Income Tax Range

Low: 3.1% (on $2,500 or less of taxable income for single filers and $5,000 or less for joint filers)

High: 5.7% (on more than $30,000 of taxable income for single filers and more than $60,000 for joint filers).

Social Security

Social Security benefits are exempt from Kansas income tax for residents with a federal adjusted gross income of $75,000 or less.

Exemptions for Other Retirement Income

Military, civil-service, and Kansas state and local government pensions are exempt. Out-of-state government pensions are fully taxed. Railroad Retirement benefits are exempt.

IRAs

Taxable at ordinary income tax rates.

401(k)s and Other Defined-Contribution Employer Retirement Plans

Taxable at ordinary income tax rates.

Private Pensions

Taxable at ordinary income tax rates.

Public Pensions

Military, civil-service, and Kansas state and local government pensions are exempt. Railroad Retirement benefits are exempt. Out-of-state government pensions are fully taxed.

Property Taxes

The median property tax on Kansas’ median home value of $135,300 is $1,890.

Tax breaks for seniors: Homeowners 55 and older who earn $33,400 or less are eligible for a refund of up to $700 under the Homestead Property Tax Refund Act (note: 50% of Social Security benefits can be excluded from income for the purposes of qualifying for this program).

The Safe Senior property tax refund is available for homeowners 65 or older with household income of $19,800 or less. The refund is 75% of the property taxes paid. The appraised value of the home cannot exceed $350,000 in order to receive this refund. Those who claim this refund cannot claim a Homestead refund.

Vehicle Taxes

Sales tax is due on purchases. Counties charge an annual excise tax based on a vehicle’s age and value.

Inheritance and Estate Taxes

None.

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