2024 State Refund Calculation Using a Non-Refundable Tax Credit

[user17632779997]

2024 Kansas State Refund is greater than the amount of Tax Paid. I see the calculation is using a non-refundable tax credit. Based on the research I conducted when investigating this situation, a Tax Refund can be greater than Tax Paid when a Refundable Tax Credit is being applied.  A Non-Refundable Tax Credit can be applied to only reduce the tax liability to zero and cannot generate a refund. 

When I started trying to find the basis for my Kansas State Tax Refund, I saw the Tax Credit being used was labeled "non-refundable.   Now I'm going back into my Tax Return to find it again as I didn't screen print or save it off.

However, since I had just completed researching whether a Tax Refund greater than the Tax Paid is valid.  The "non-refundable" Tax Credit was still resonating in my head.  I just to look it up again for sanity sake.

[NCperson]

@user17632779997  note sure there is a question there, but you may be confusing terms.  

Tax Liability is your reported income times the tax rate for your state. 

a non-redundable credit can reduce the tax liability but can not reduce the tax liabiltiy below zero.

a refundable credit CAN reduce the tax liability below zero. 

a refund is the tax liability less withholdings, less estimated taxes paid, and les any remaining refundable credit resulting in a negative number.  if it's posiive, then there is an Amount Due. 

[user17632779997]

I agree and I stated that in my message I was validating whether a state tax refund can be > state tax paid.  That's when I read what you replied with.  So, I started investigating and that's when I spotted that TT was using a non-refundable tax credit.

My question would then be what next?

Fix it or Roll the Dice...

Seriously though, I wanted to first make sure I was correct in my interpretation and now I'm going to find it again so I can fix it.

[NCperson]

@user17632779997 from what you wrote, 

by 'state tax paid' do you mean the tax liability? 

maybe best to use line numbers from the tax return so that there is no misunderstanding. 

https://www.ksrevenue.gov/pdf/k-4024.pdf

Line 12 is the tax liability.  It is what you owe

Line 19 is the non-refundable credits.  It can reduce Line 12 but not below zero.

Line 28 is the refundable credits.  It can reduce Line 12 and go below zero.  (if below zero, that is the refund on Line 34, if not below zero that is the Amount Due on line 29)

what is the specific non-refundable credit that you see TT using? 

When you state that a Tax Refund can be greater than Tax Paid, what two lines are you referring to?  Tax Refund is Line 34.  But there is no specific line item called "Tax Paid".  Do you mean the Tax Liablity on Line 12 or do you mean the sum of the W-2 withholdings (line 20) and estimated taxes paid (line 21)?  

[user17632779997]

The tax paid is the amount reported on the W2.  That was the basis of why I started the investigation on the validity on the refund amount. 

[NCperson]

the 'tax paid" is "Withholdings".. it is part of Line 28 / refundable credits.   

Comparing Withholdings on your W-2 to the Refund is sorta "apples and oranges". 

Take the tax liability on Line 12 subtract any non-refundable credits (line 19) and any refundable credits (line 28, which includes the Withholdings).  If the result is positive, there is an Amount Due (line 29).  If the result is negative, there is a refund (line 34). 

it's really that simple!