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Kansas Taxes: What You Need to Know

Federal, State, and Local Tax Withholding in Kansas in 2024

Federal Income Tax:

All Kansas residents are subject to federal income tax, which is applied using progressive tax brackets determined by the IRS. These brackets are adjusted annually to account for inflation. For 2024, federal income tax rates for individuals range from 10% to 37%.

• 10% tax rate: Applied to taxable income up to $11,000 for single filers.
• 37% tax rate: Applied to income over $578,125 for single filers.

Other federal tax brackets are:

• 12% for income between $11,001 and $44,725,
• 22% for income from $44,726 to $95,375,
• 24% for income from $95,376 to $182,100,
• 32% for income between $182,101 and $231,250,
• 35% for income between $231,251 and $578,125.

Federal withholding applies uniformly across the U.S., including Kansas, and is deducted from an employee’s paycheck based on income and filing status.

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Kansas State Income Tax:

Kansas has a progressive state income tax system, with three tax brackets for 2024:

• 3.10%: For taxable income up to $15,000 for single filers or $30,000 for those married filing jointly.
• 5.25%: For taxable income between $15,001 and $30,000 for single filers, or $30,001 to $60,000 for those married filing jointly.
• 5.70%: For taxable income over $30,001 for single filers, or $60,001 for those married filing jointly.

Unlike the federal system, Kansas only has three brackets, which means the top earners pay a flat rate of 5.70% on income above the highest threshold.

This progressive tax system is designed to ensure that individuals with higher incomes pay a larger share in taxes compared to lower-income residents, providing some relief to middle and lower-income households.

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Local Taxes in Kansas:

Kansas does not impose local income taxes, but municipalities do collect property and sales taxes. Local governments can add sales taxes on top of the state’s 6.50% base sales tax rate.

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• The average combined state and local sales tax rate in Kansas for 2024 is approximately 8.65%. This figure includes the statewide sales tax rate of 6.5%, with local jurisdictions able to impose additional taxes, leading to variations depending on the specific location. For instance, cities like Wichita and Overland Park may have slightly higher local sales tax rates than more rural parts of the state.

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Property Taxes:

Kansas has relatively high property tax rates compared to the national average, with an average effective property tax rate of 1.26% of assessed home value. This rate can vary depending on where you live. For instance, property taxes in urban areas like Johnson County tend to be higher than in more rural counties, such as Coffey County or Greeley County. The valuation of property by local governments influences the effective tax rates across the state​.

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FICA & State Insurance Taxes in Kansas in 2024

FICA (Federal Insurance Contributions Act) taxes consist of Social Security and Medicare taxes:

1. Social Security Tax: Employees pay 6.2% on income up to the wage base limit, which is $168,600 for 2024.
2. Medicare Tax: Employees contribute 1.45% on all earnings, with no wage base limit. An additional 0.9% Medicare tax applies to individuals earning more than $200,000 (or $250,000 for married couples filing jointly).

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In addition to FICA, Kansas employers may also withhold state-mandated unemployment insurance contributions from their employees’ paychecks. Kansas currently has a 0.2% rate for employers on the first $14,000 of each employee’s wages.

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Pre-Tax Deductions (Medical Insurance, 401(k), etc.) in Kansas in 2024

Pre-tax deductions provide Kansas residents the opportunity to reduce their taxable income, ultimately lowering the overall amount they owe in federal, state, and FICA taxes. These deductions are taken directly from an employee’s gross pay before taxes are calculated. Below are some of the most common pre-tax deductions available in Kansas in 2024:

1. Health Insurance Premiums:

• • Employee contributions to health, dental, and vision insurance through employer-sponsored plans are generally pre-tax. This means that the premiums are subtracted from gross wages before calculating taxes, thereby reducing an individual’s taxable income and decreasing the amount owed in federal, state, and FICA (Social Security and Medicare) taxes.
  • This deduction can significantly reduce tax liability, providing immediate tax savings while ensuring healthcare coverage.

2. 401(k) Contributions:

• • Contributions to 401(k) retirement accounts are made pre-tax, which allows employees to reduce their current taxable income while saving for retirement. This is particularly advantageous, as individuals save money both on their retirement accounts and on their current tax bills.
  • For 2024, the maximum contribution limit for a 401(k) is $23,000. If you are 50 years or older, you can make an additional $7,500 catch-up contribution, totaling $30,000. By making these contributions pre-tax, individuals not only prepare for their future but also reduce their taxable income in the present.

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3. Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA):

• • Contributions to HSAs and FSAs are also pre-tax, providing an effective way for employees to save for medical expenses. 
  • Health Savings Accounts (HSA) are for individuals enrolled in high-deductible health plans (HDHPs). In 2024, HSA contribution limits are set at $4,150 for individuals and $8300 for families. Additionally, those aged 55 or older can contribute an extra $1,000 as a catch-up contribution. Contributions made to an HSA are deductible, reducing both federal and state taxable income, and any growth or withdrawals for qualified medical expenses are also tax-free.
  • Flexible Spending Accounts (FSA) allow employees to contribute pre-tax dollars to cover medical, dental, and vision expenses. For 2024, the FSA contribution limit is $3,050. FSAs are typically a “use-it-or-lose-it” account, meaning that funds must be used within the plan year or they may be forfeited, but they still offer valuable tax savings.

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4. Commuter Benefits:

• • Kansas employers may also offer pre-tax commuter benefits to help offset the cost of public transit, parking, or other commuting expenses. Employees can set aside a portion of their salary before taxes to cover these expenses.
  • In 2024, the IRS limit for pre-tax commuter benefits is $315 per month for transit expenses and an additional $315 per month for qualified parking expenses. Utilizing commuter benefits can help employees save money on commuting costs while reducing taxable income.

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By leveraging these pre-tax deductions, Kansas residents can ensure they are maximizing their tax savings, investing in their future, and securing a stable financial foundation for medical needs, retirement, and even daily commuting.

2024 Kansas Tax Table Example

Median Household Income in Kansas

The median household income in Kansas is projected to reach $70,333 in 2023, continuing a trend of modest growth seen in recent years. This growth reflects economic improvements, particularly in sectors like healthcare, manufacturing, and services.

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Despite slower growth in rural areas, the lower cost of living in Kansas helps residents maintain purchasing power, even as median incomes rise.

Kansas Tax Brackets 2024: Detailed Breakdown

Kansas follows a progressive state income tax structure with three tax brackets for 2024. This means that higher earners pay a larger percentage of their income in taxes, and income is taxed at different rates depending on the taxpayer’s earnings.

The three income tax brackets for single filers and married filers (jointly) are as follows:

Here’s how Kansas’s progressive tax system works in practice:

1. First Bracket (3.10%): The first portion of taxable income, up to $15,000 for single filers and $30,000 for married couples filing jointly, is taxed at a rate of 3.10%.
2. Second Bracket (5.25%): Income between $15,001 and $30,000 (single) or $30,001 and $60,000 (married filing jointly) is taxed at 5.25%. Any income exceeding the first $15,000/$30,000 is subject to this rate.
3. Third Bracket (5.70%): Any income above $30,001 for single filers or $60,001 for joint filers is taxed at the top rate of 5.70%. This is the highest state tax rate in Kansas.

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Explanation of Progressive Taxation in Kansas

Kansas uses this graduated tax rate system to ensure that those who earn more contribute a larger share of their income in taxes. The advantage of a progressive system is that it places a lower tax burden on lower-income individuals, while those with higher earnings pay a higher percentage.

• Example 1: A single filer with an income of $25,000 will pay 3.10% on the first $15,000 of income and 5.25% on the remaining $10,000. This results in a lower effective tax rate overall because only a portion of their income is taxed at a higher rate.
• Example 2: A married couple filing jointly with an income of $70,000 will pay 3.10% on the first $30,000, 5.25% on the next $30,000, and 5.70% on the remaining $10,000.

Because the Kansas tax system is marginal, only the income exceeding each bracket’s threshold is taxed at the higher rates, preventing the entire income from being taxed at the top rate.

Additional Tax Considerations

Kansas taxpayers should also take into account any pre-tax deductions, like contributions to 401(k) plans, health savings accounts (HSAs), or flexible spending accounts (FSAs), as these deductions reduce taxable income and, thus, may lower their state tax liability.