Kansas provides a subtraction modification for certain resident taxpayers who receive a lump sum distribution and elect to use the special federal tax treatment available to individuals born before January 2, 1936.
If the taxpayer uses the federal Form 4972, Tax on Lump-Sum Distributions, the portion of the lump sum distribution subject to the special federal computation may be eligible for a subtraction from Kansas income to prevent the income from being taxed twice for Kansas purposes. The Kansas subtraction is claimed on the Kansas Schedule S.
Those who qualify, a subtraction can be entered equal to 13% of the qualifying lump-sum distribution that is showing on the Form 4972. The remaining portion of the distribution would be taxed according to Kansas tax rules.
How to make the entry
- State
- Edit the Kansas return using the three dots
- Tax
- KS tax on Lump Sum Distributions