Kansas Municipal Bond Reporting

[aviaasus]

I live in Kansas, and own a municipal bond from another state.  My Kansas tax return (K40) asks that I list "Municipal Bond Interest Not Exempt from KS Tax, reduced by related expenses."  This $ amount is then added to my federal AGI, so that the interest from the nonKS muni can be taxed by KS.

This nonKS muni paid me $1000 in coupon payments in 2025.  I paid a premium when I bought the bond, resulting in a $200 amortized bond premium reported on the 1099-INT Box 13.  Therefore I reported 1000-200=800 on the 1040 line 2a (Tax-exempt Interest).

Does KS want me to add $1000 to my FAGI?  Or $800?  In other words, does KS recognize bond premium paid on nonKS munies?

[ReneV4 · Accepted solution]

No. KS does not want you to add $1,000. You should add $800 because Kansas follows the federal definition of income for these adjustments, so it recognizes the $200 reduction you reported on your federal return.