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Withholding Taxes: Kansas

Withholding Taxes requirements for other states

Federal law and guidance on this subject should be reviewed together with this section.

Authors: Alan L. Rupe, Aaron Sauerwein, Kutak Rock LLP

Summary

  • Kansas residents, and nonresidents who work in Kansas, are subject to income tax withholding in the state. Kansas does not have a reciprocal agreement with any other state. See Withholding on Residents and Nonresidents.
  • Employees are required to complete a Kansas Form K-4, Employee's Withholding Allowance Certificate, upon being hired. Exempt status must be claimed annually, February 15 of the next calendar year. See Employee's Withholding Allowance Certificate.
  • Kansas requires income tax withholding on all supplemental wages, such as bonuses and commissions. A flat withholding rate applies if supplemental wages are paid separately from regular wages. See Supplemental Wages.
  • Employers must provide current employees with a federal Form W-2, Wage and Tax Statement, by January 31 of each year. Employers may provide the form to employees who terminate before the end of the year either on the last day of employment, or by January 31 of the following year. See Form W-2 Requirements.
  • Income tax withholding records must be kept for each employee for three years after the tax due date, or the date the tax was paid, whichever is later. See Recordkeeping Requirements.

Withholding on Residents and Nonresidents

Kansas employers are required to withhold state income tax from the wages of both residents (no matter where the services are performed) and nonresidents who work in Kansas, excluding individuals who work for less than 14 days in a calendar year as extras in movies or on television. An extra is an individual who pantomimes in the background, adds atmosphere to the set and performs such actions without speaking. +Kan. Stat. Ann. §§ 79-3296. Kansas does not have a reciprocal agreement with any other state.

If an employer is not required to withhold federal income taxes from an employee's wages, then the employer is also not required to withhold state income tax on the individual's wages. +Kan. Stat. Ann. § 79-3296(c). Similarly, if an employer must reinstate federal income tax withholding for an employee, then it must likewise reinstate Kansas withholding for the employee. +Kan. Stat. Ann. § 79-3296(b).

Definitions

Employer

For Kansas income tax withholding purposes, an employer is defined as any person, entity, or other organization, that:

  • Is an employer for federal income tax withholding purposes;
  • Maintains an office, does business, or has income from sources within Kansas and receives or received services, of any nature, from an individual employed as an employee by the employer; and
  • Controls the payment of the employee's wages for services.

The definition of employer also includes officers, agents or employees of the person that controls the payment of employees' wages, as well federal, state and local government agencies or instrumentalities.

+Kan. Stat. Ann. § 79-3295(b).

Employee

Kansas defines an employee as a Kansas resident performing services for an employer within or without Kansas, or, a nonresident performing services for an employer within Kansas. The definition of employee also includes officers, employees, or elected officials of federal, state and local government agencies or instrumentalities. +Kan. Stat. Ann. § 79-3295(a).

Resident

A Kansas resident is a person who is domiciled in Kansas, or spends more than six months of the year in Kansas.

Wages

Wages are defined as any form of compensation an employer pays to an employee for personal services including wages, salaries and commissions. +Kan. Stat. Ann. § 79-3271(c).

Employee's Withholding Allowance Certificate

As soon as an employee is hired, the employee should complete a Kansas Form K-4, Employee's Withholding Allowance Certificate. If an employee does not complete and submit the form, the employer should withhold as if the employee were single with zero withholding allowances.

To be exempt from withholding, an employee must establish that he or she (1) had the right to a refund in the previous year of all state income withheld because the employee had no tax liability, and (2) expects no tax liability for the current year. Exempt status must be claimed annually, by February 15 of the next calendar year.

Supplemental Wages

Kansas requires withholding on all supplemental wage payments, such as bonuses, commissions, overtime pay and severance. Guide to Kansas Withholding Tax (KW-100).

Kansas specifically provides that the following supplemental wages are subject to income tax withholding:

  • Supplemental unemployment compensation, annuity or sick pay;
  • Payments pursuant to a voluntary withholding agreement;
  • Gambling winnings;
  • Taxable payments of Indian casino profits;
  • Vehicle fringe benefits; and
  • Management or consulting fees paid in the ordinary course of a trade, business or other for profit venture.

+Kan. Stat. Ann. § 79-3295(h).

If supplemental wages are paid with regular wages, employers should use the percentage method tables in effect to determine withholding. If paid separately from regular wages, a flat percentage of the supplemental wage payment should be withheld. See Taxation of Supplemental Wages by State. Guide to Kansas Withholding Tax (KW-100).

Form W-2 Requirements

Employers must provide federal Form W-2, Wage and Tax Statement, to each current employee by January 31 of each year. Employers also must provide Form W-2 to terminated, and other former, employees either at the time the employee leaves employment, or by January 31 of each year, whichever the employer prefers. +Kan. Stat. Ann. § 79-3295. See Form W-2.

Penalties

Any employer that fails to provide Form W-2 on time is guilty of a misdemeanor and may be fined up to $100 per violation. +Kan. Stat. Ann. § 79-3299(c).

Recordkeeping Requirements

Kansas employers are required to keep the following income tax withholding related records for each employee:

  • Name, current address and Social Security Number;
  • All amounts of compensation paid, by pay period;
  • Date and amounts of all taxes withheld;
  • Copies of all withholding returns filed with the Kansas Department of Revenue; and
  • Federal Forms W-4 of employees and any written employee requests for additional withholding.

Records must be kept for three years after the tax due date, or the date the tax was paid, whichever is later.

Guide to Kansas Withholding Tax (KW-100).

Future Developments

There are no developments to report at this time. Continue to check XpertHR regularly for the latest information on this and other topics.

Additional Resources

Department of Revenue Guide to Kansas Withholding Tax (KW-100)