Working in MO and staying in KS. How to avoid double tax ?

[KrisD15]

No, Cities are not included with any state agreements. 

If you work in, or live in, a city or county that taxes, you will be liable for that tax. 

Some states give credit for state tax paid to another state. This does not include City or County tax, ONLY STATE TAX. 

[girigiri]

Hi 

I found the following after some exploration where in it says to incliude taxes paid to any political subdivision. Hence, I am confused.....

Taxes Paid to Other States by Kansas Residents If you are a Kansas resident you may claim this credit if: 1) your
KAGI (line 3) includes income earned in the other state(s); and 2) you were required to pay income tax to the other state(s) on that income.
Important—Your credit is NOT the amount of tax withheld in the other state(s); it is determined from the “Worksheet for Residents” that follows. Complete the tax return(s) for the other state(s) and
the income or earnings tax return filed with any local jurisdiction. If a return was not required for the local jurisdiction, complete a local return showing the amount of tax paid to the local jurisdiction and
include it with your K-40 before using the worksheet.
The amount of income tax paid to another state includes tax paid to that state and to any local political subdivision

[ErnieS0]

Yes. The state of Kansas allows a deduction for the Kansas City Missouri (KCMO) earned income tax @girlgirl.

The Kansas Department of Revenue issued Notice 15-15 allowing a deduction for "paid to such state government as well as any local jurisdiction within that state."

TurboTax does not do this for you. It only does the credit for Missouri tax paid. You will have to add KCMO yourself.

1. Prepare your Missouri nonresident return first
2. Start Kansas
3. Go to Take a look at Kansas credits and taxes
4. Select Credit for Taxes Paid to Other States
5. On Summary of Taxes Paid to Other State select +Add
6. On Other State Information select Missouri in the drop down
7. Enter the amount from W-2 Box 18 Local wages as Double-taxed income
8. Enter the W-2 Box 19 Local Tax Paid as under Tax Paid to Missouri (unless if are filing a KCMO tax return and the amount is different)
9. Missouri Income Included in Kansas AGI will be the same as Double-taxed income.
10. You should see two credits on Summary of Taxes Paid to Other States​​​​​​​

[MJLOZ]

KS executive order 21-18 required KS employers to take KS withholding even if income was earned in MO. Some did. My employer previously had all MO taken out of mine and I had KS taken out of my wife's as all her income is KS income and it all worked out. That means KS taxed all my income in 2021 for the first time. MO received none. I calculated the MO NR tax due. The problem is I don't see a means on the KS form to calculate the double taxed income. The W-2 will not show the MO income wages. Do I calculate similar to MO and enter as double taxed income as you noted even though the W-2 doesn't have MO wages?

[GeorgeM777]

Part of your question seems to indicate that you are a resident of KS and work in MO as a non-resident.  If that is the case, in order to get a tax credit for having paid income taxes to your non-resident state (MO), you need to complete your MO return first.  Additionally, you need to indicate in the Personal Info section of TurboTax that you received income from another state (MO).  

If the above comments are not correct with regard to your residency status, then complete your non-resident state return first.  Calculate whatever tax is due to your non-resident state.  Then, when you complete your return for your resident state, there will be a page in TurboTax that will ask whether you paid taxes to any other state.  Select "yes," and continue through the application.  

@MJLOZ

[Poi12345]

If living in KS revenue from Mo and KS, which tax to do first

[DoninGA]

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@Poi12345 wrote:

If living in KS revenue from Mo and KS, which tax to do first

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You complete the nonresident state tax return first.

[CRMO]

@ErnieS0  But does the MO return also get a credit for the taxes pd to KS?

I have the opposite status - a MO resident / KS non resident earning some income in KS. 

In preparing the K-40 first (as nonresident for 2022), line 13 asks for cr. paid to other states. The K-40 has total tax $960 before the line 13 cr. so I paused and moved onto MO-1040. It has total tax 2181 before the cr for KS taxes. On MO-CR, the cr for KS tax is 829 (KS inc. = 38% of total, so 38% of 2181 MO tax = 829), bringing the MO tax down to 1352.

What is the proper amount to appear on K-40 line 13? Instructions state, "...the credit amount cannot exceed the tax liability shown on the other state’s tax return and the income derived from the other state must be included in your Kansas adjusted gross income (KAGI), line 3 of Form K-40."

1352?

$960 to elim the KS tax?

$0? I was afraid the cr was only for KS residents or partial residents filing as NR based on the instructions.

[TomD8]

@CRMO --

The "other state credit" is granted by the resident state for taxes paid to the non-resident state.  In TurboTax, if you complete the non-resident state return before you do your home state return, the program will automatically calculate and apply the credit.

[CRMO]

@TomD8  TY! Oks so there's no double credit. So in my case, the K40 will have $0 credit for MO taxes, it's only the MO-CR form which gives a break on MO taxes due to the $960 owed to KS (the cr is just 829 which has to do I believe with MO's lower tax rates). Right? At first I was stuck in this chicken-egg vortex of which state does what first lol...

[TomD8]

@CRMO --

Correct.  Since you're a resident of MO, you'll only see an "other state credit" on your MO tax return, not on your KS tax return.  

[girigiri]

I live in Kansas and work in Missouri. In my W2 in addition to Missouri tax deduction, there is a deduction for local Income tax (KCMO locality). 

When filing Kansas return, I know we get credit for state taxes paid  to Missouri. But, where should I enter the amount for Missouri local income tax in the Kansas return to account for the payment and request for credit on it.

Regards,

[DMarkM1]

The KC city tax paid is automatically included in the calculation for the "Credit for taxes paid to another state" in the KS resident return.  When you work the nonresident MO return and include the KC City return the taxes are combined and show on the KS return.  Remember the credit will be based on the taxes actually paid/owed not what was withheld.  

After completing the MO nonresident return take note of the taxes paid to MO and KC. You can go back to the KS return.  "Revisit" the "KS Taxes and Credits" section and the "Taxes paid to another state" topic.  "Edit" the MO line on the "Other state taxes" page.  You should see the total taxes paid according to the completed MO and KC returns.  

[girigiri]

Hi DMarkM1:

Thank you for your input. 

When I go back to the KS return, it shows the amount that was paid to Missouri on W2 in the line 13 of K-40 (Kansas return).  It does not include the local tax paid to the KCMO community of Missouri in the credit.  

Regards,

[DMarkM1]

If the amount is not showing correctly on the KS "Other Tax Paid to MO" page you can put in the correct amount in the "Correct amount" box.  Remember it needs to be what the final tax actually was according to the MO state return and the Kansas City tax return that you completed in the MO interview, not necessarily what was withheld.