Look inside Kansas retirement numbers

Here’s an example of why Kiplinger ranks Kansas third from the bottom in how retirees are taxed. This is the impact of taxing social security for retirees who make more than $75,000.

Let’s assume we have a married couple — both 66. Between them they have $38,999 in wages and $36,000 in Social Security. Then for 2019 the Federal tax is $3,098; KS tax is $1,009; and FICA is $2,983 for a total of $7,090.

Assume they have the misfortune of making $39,000 — one extra dollar in wages. Then for 2019 the federal tax is $3,098; KS tax is $2,933; and FICA is $2,984 for a total of $9,014.

What happened? Their extra $1 in income cost them an additional $1,924 in state taxes — their entire social security income of $36,000 is subject to Kansas tax!

Retirees could use this $1,924 to help pay outrageous property taxes, or outrageous sales tax or Part B of Medicare or a Medigap policy. Or, over 10 years, pay for a move to another state that likes retirees. Additionally, the standard deduction for married filing joint in Kansas is $7,500.

According to the Kansas Department of Revenue, the 2019 September and October tax receipts were $80 million above projections. This Social Security tax is impacts about 68,000 returns or a third of the Social Security recipients in Kansas and results in about $95 million in annual revenue (2016).

Stephen Hare, Topeka