I need help with IRA withdrawal while living in Kansas. Is that considered Kansas state income and I have to pay state taxes in Kansas or just federal taxes?

[dhajovsky]

We reported a withdrawal of 20,000 from an IRA that was considered taxable income while living in Kansas. We are paying federal taxes on that money. Do we have to pay state taxes in Kansas on that money since we were living in Kansas at the time even though that money was used for something else in a different state?

[AnnetteB · Accepted solution]

Yes, even though the money was not used in Kansas it will be taxed in Kansas since you were a resident when it was distributed from the IRA. 

The starting point for the Kansas income tax return is the Federal Adjusted Gross Income (AGI).  Adjustments are made from there to add items that are taxed by Kansas and not taxed on the Federal return or to subtract items that are tax on the Federal return but are not taxed by Kansas. 

There is a list of various retirement plan distributions that are not taxed by Kansas, but I did not find a provision either in the Kansas individual income tax return instruction booklet or within TurboTax for excluding any IRA distributions from the Kansas taxable income. 

To take a look at the Kansas instruction booklet for more information, click here.