With new Kansas tax cuts, how much relief you can expect on income and property taxes?

Kansas lawmakers at a special session passed a compromise tax cut package with overwhelming bipartisan supermajorities, and Gov. Laura Kelly has signed it into law.

The law will officially take effect when it is published in the Kansas Register, which was expected to happen Thursday.

Here's how much you can expect to save with the tax relief in Senate Bill 1 .

Kansas property taxes cut

Owners of most residential properties will see a tax cut starting with tax year 2024.

While property taxes are primarily levied by local governments, one piece of the pie is the state's 20-mill levy that is used to help fund public schools. That levy has an exemption on part of the home value, and the exemption is increasing from $42,049 to $75,000.

For owners of homes worth $42,049 or less, there is no property tax relief because your property is already exempt from that 20-mill levy.

For owners of homes worth $75,000 or more, the property tax relief is $75.79 in the first year. The amount of tax relief will slowly diminish over time, as the law repealed an existing statute adjusting the exemption for inflation, based on residential valuation increases.

For owners of homes worth between $42,049 and $75,000, your relief is less than $75.79 and depends on hour home's value.

Here's how to figure out your tax cut under new law

To calculate your tax cut from the new law, take the county appraiser's valuation of your property, subtract $42,049 for the old exemption amount, multiply that by 0.115 for the 11.5% residential assessment rate, divide it by 1,000 because a mill equals $1 in tax per $1,000 in assessed valuation, then multiply by 20 because the state levy is 20 mills.

Lawmakers also abolished an unfunded program that used state tax revenues to subsidize local property tax cuts.

Over five years, the property tax piece amounts to $236 million of the law's total $2 billion in tax relief.

Social Security no longer taxed

Social Security benefits are now longer taxable income in Kansas. The change is retroactive to the start of the calendar year.

Such benefits were previously taxed once your income hit $75,000, at which point there was a cliff where the difference of a single dollar more in income could substantial increase your tax bill. Instead of smoothing out the cliff, politicians opted to fully exempt Social Security benefits from taxes.

If you do not receive Social Security benefits, you won't see any tax relief from this provision. You also won't see any tax cut if you receive Social Security benefits but have an income below $75,000.

The Social Security exemption amounts to $657 million of the law's total $2 billion tax relief over five years.

Income tax cuts

The biggest change in the new law is to the state's income tax brackets.

Under the old law, the state had three progressive income tax brackets. For an individual taxpayer, the old tiers were:

• A 3.1% tax on the first $15,000 in income.
• A 5.25% tax on any income between $15,000 and $30,000.
• A 5.7% tax on any income above $30,000.

Income thresholds were doubled for married couples filing jointly.

Under the new law, the state has two brackets. For an individual taxpayer, the tiers now are:

• A 5.2% on the first $23,000 in income.
• A 5.58% tax on any income above $23,000.

Income thresholds are doubled for married couples filing jointly.

But income taxes are more complicated than multiplying your income times the tax rate. Among the other factors are the standard deduction and the personal exemption, both of which are getting a boost.

The law increases the standard deduction by the following:

• For individual taxpayers, from $3,500 to $3,605.
• For married filing jointly taxpayers, from $8,000 to $8,240.
• For head of household taxpayers, from $6,000 to $6,180.

The personal exemption increases from the old $2,250 for each exemption to a new $18,320 for married taxpayers filing jointly and $9,160 for other taxpayers, plus $2,320 for each dependent.

These income tax pieces combined account for $1.1 billion of the law's $2 billion in tax relief over five years.

What those income tax changes mean for taxpayers

At the request of House Democrats, the Kansas Legislative Research Department prepared an analysis of how taxpayers will be affected by the changes to income tax rates, the standard deduction and the personal exemption.

The analysis shows that the biggest tax cut, in terms of a percentage of current tax liability, goes to taxpayers with the lowest incomes. In terms of dollars, the biggest tax breaks go to taxpayers with the lowest and highest incomes, while those in the middle get comparatively less. However, the middle gets far more benefit than under past flat tax proposals .

For a single adult with no dependents:

For a married couple filing jointly with no dependents:

For a married couple filing jointly with one dependent:

Child care tax credit

The state's existing income tax credit for household and dependent care expenses is increasing from 25% to 50% of the federally allowed amount.

That provision, commonly referred to as the child care tax credit, amounts to $30 million of the law's total $2 billion in tax relief over five years.

Privilege tax on banks

Banks and other financial institutions are getting a privilege tax cut. The normal tax rate was reduced from 2.25% to 1.94% for banks, while other financial institutions had their rate cut to 1.93%. The financial institution surtaxes were not changed.

That tax cut amounts to $20 million of the law's total $2 billion in tax relief over five years.

Other tax cut laws previously enacted

The compromise tax cut plan did not include any sales tax cuts, but that doesn't mean you won't see any relief on purchases.

Based on a 2022 law, the state sales tax on grocery food is scheduled to be fully eliminated starting Jan. 1, 2025. Some politicians had hoped to end that tax earlier, but because it took until June to reach a compromise, the most they could have done was end that tax three months early.

Buyers will also see other sales tax relief via House Bill 2098 , a law enacted earlier this year by bipartisan supermajorities over the governor's veto. That law provides sales tax breaks for certain purchases, such as on custom meat processing and on manufacturer's coupons, totaling $124 million over five years.

A near-unanimous Legislature passed and the governor signed into law Senate Bill 410 , which had a few tweaks to income, property and sales taxes totaling $46 million in tax cuts over five years.

In nearly party-line votes, legislative supermajorities overrode Kelly's veto of House Bill 2465 , which included tax breaks related to adoption and anti-abortion counseling centers totaling $67 million in tax cuts over five years.

Jason Alatidd is a Statehouse reporter for The Topeka Capital-Journal. He can be reached by email at jalatidd@gannett.com. Follow him on X @Jason_Alatidd .

This article originally appeared on Topeka Capital-Journal: With new Kansas tax cuts, how much relief you can expect on income and property taxes?