Kansas Form K-40
Individual Income Tax & Food Sales Refund

Forms and Instructions 2007

General Instructions

What’s New...

The following changes are effective for the 2007 tax year:

• Social Security Benefits. All benefits received under the Social Security Act (including SSI benefits) that are subject to federal income tax are no longer subject to Kansas income tax when your Federal Adjusted Gross Income (line 1 of Form K-40) is $50,000 or less. See Schedule S instructions for line A7.

• KPERS Retirement Benefits. KPERS retirement benefits, and all earnings thereon, that are rolled over into a qualified retirement account (i.e., 401K, IRA, etc.) are not subject to Kansas income tax even if the KPERS benefits are segregated from, or commingled with, other retirement funds. See Schedule S instructions for line A8.

• Long-term Care Insurance Contracts. A subtraction modification may be taken for an amount not exceeding $700 per contract, per taxpayer, of the premium costs paid for qualified long-term care insurance contracts. This subtraction modification may be taken even if a deduction is taken on the federal return. See Schedule S instructions for Line A14.

• Learning Quest And Other Qualified Tuition Programs (QTP). Contributions made during 2007 to the Learning Quest Education Savings Program or to other states’ QTPs (also called 529 plans) are not subject to Kansas income tax. See Schedule S instructions for Line A15.

  Visit www.learningquestsavings.com to learn more about the Learning Quest Education Savings Program.

• Kansas Earned Income Credit (EIC). The Kansas EIC has increased from 15% to 17% of the Federal Earned Income Credit. See instructions for line 23 of Form K-40.

• Food Sales Tax Refund. Qualifying income and refund amounts for the food sales tax have increased and are as follows. Additional qualifications for this refund can be found at Food Sales Tax Refund.

If your qualifying income is:	Your food sales refund is:
$ 0 — $14,850	$78 per exemption
$14,851 — $29,700	$38 per exemption

• New Credit — Historic Site Contribution Credit. This refundable credit is 50% of the amount contributed to a state-owned historical site or to a 501(c) organization which owns and operates a historical site. See Schedule K-75.

  [Please note: Schedule K-75 is not included in the online instructions.]

• New Energy Credits. There are three new carry forward energy credits available that pertain to environmental compliance, storage and blending equipment, and renewable electric cogeneration. See Schedules K-81, K-82 and K-83 for details.

  [Please note: Schedules K-81, K-82 and K-83 are not included in the online instructions.]

• New Credit — Film Production Credit. This carry forward credit is 30% of the direct production expenditures made by an eligible film production company. See Schedule K-86.

  [Please note: Schedule K-86 is not included in the online instructions.]

• Revised Credits. The Business & Machinery Credit for property taxes paid was revised to reflect the increase in the amount of the credit from 20% to 25% of the property taxes timely paid in 2007. See Schedule K-64. The definition of an Alternative Fueled Vehicle changed effective July 1, 2007. Vehicles powered by E-85 or M-85 Fuel and fuels (other than alcohol) derived from biological materials such as biodiesel qualify for this credit. See Schedule K-62.

  [Please note: Schedules K-64 and K-62 are not included in the online instructions.]

Electronic Filing and Payment Options

WebFile

WebFile is a safe and free online system for filing your Kansas individual income tax and you will get your refund deposited into your bank account Fast! If you have a balance due, you have the option to pay electronically as well. WebFile is quick, secure and Free whether you are filing an original return or an amended return. You can even use WebFile if you itemize your deductions.

To use the system you will need access to the Internet. You should have your mailing label from the back of the Kansas Individual Income Tax & Food Sales Tax Refund booklet handy before accessing the system. If you do not have a mailing label, you can use last year’s original refund or balance due amount to access the system.

Note: Kansas residents that did not file a 2006 Kansas return can use WebFile by following the on-line instructions. Nonresidents must have filed a 2006 Kansas return to use WebFile for 2007.

Direct Payment

Direct Payment is recommended when you WebFile or IRS e-File your Kansas return and have a balance due. It is also an option if you file a paper K-40 return – see Direct Payment instructions. This payment method allows you to "file now, pay later" by choosing the date you would like your bank account debited. You can file your tax return in February and initiate payment on April 15th. Direct Payment saves time – there is no check to write, no vouchers to complete and you are assured that your payment is made on time. Visit www.webtax.org for more information.

IRS e-File

IRS e-File is a way to file your return electronically to the IRS and KDOR using an authorized IRS e-File provider and within 48 hours you will get confirmation that KDOR has accepted your return.

You can prepare your own return and have a professional transmit it to the IRS and KDOR or you can have your return prepared and electronically transmitted by a tax professional. Depending on the tax professional and the specific services requested, a fee may be charged. You can also e-File using KDOR approved commercial tax filing web sites or software products. Visit our web site www.webtax.org for a listing of authorized IRS e-File providers and software products.

Credit Card Payment

Taxpayers also have the option to pay by credit card. This service is available on-line or by phone through two payment centers – Official Payments Corporation and Link2Gov.

Official Payments Corporation
1-800-2PAYTAX (1-800-272-9829)
www.officialpayments.com

Link2Gov
1-888-KS-Taxes (1-888-578-2937)
www.kstaxpayment.com

Both payment centers charge a convenience fee to accept Mastercard, VISA, Discover and American Express. For rules regarding the credit card transactions and instructions for how to sign up to pay by credit card, visit the payment centers’ web sites or call their toll-free numbers.

Qualifying Income Worksheet for the Kansas Food Sales Tax Refund

All taxpayers who meet the "residency" and "taxpayer status" qualifications must complete this worksheet to determine if they meet the "income" qualification for a Food Sales Tax refund.

• If you are not required to file a federal return, enter your income and deduction amounts in Column A, beginning with line 1.

• If you filed federal Form 1040, 1040A or 1040EZ, complete Column B, beginning with line 24.

If line 30 is "more" than $29,700 you do not qualify for the Food Sales Tax Refund.

If line 30 is "less" than $29,701, follow the instructions for line 25 of Form K-40 to calculate the amount of your Food Sales Tax refund.

General Information

If any due date falls on a Saturday, Sunday, or legal holiday, substitute the next regular workday.

Who Must File a Return

Kansas Residents

A Kansas resident for income tax purposes is anyone who lives in Kansas, regardless of where they are employed. An individual who is away from Kansas for a period of time and has intentions of returning to Kansas is a resident.

If you were a Kansas resident for the entire year, you must file a Kansas Individual Income Tax return if:

• You are required to file a federal income tax return, or

• Your Kansas adjusted gross income is more than the total of your Kansas standard deduction and exemption allowance.

The minimum filing requirements are shown in the following table. If you are not required to file a federal return, you may use this table to determine if you are required to file a Kansas return. For example, if your filing status is single, and you are over 65, you need not file a Kansas return unless your gross income is over $6,100. A married couple filing jointly would not be required to file a Kansas return unless their gross income is over $10,500.

A Kansas resident must file if he or she is:

Single "or" Married Filing Separate

• Under 65 and has a gross income of at least $5,250

• 65 or older or blind and has a gross income of at least $6,100

• 65 or older and blind and has a gross income of at least $6,950

Married Filing Joint

• Under 65 (both spouses) and has a gross income of at least $10,500

• 65 or older or blind (one spouse) and has a gross income of at least $11,200

• 65 or older or blind (both spouses) and has a gross income of at least $11,900

• 65 or older and blind (one spouse) and has a gross income of at least $11,900

• 65 or older or blind (one spouse) and 65 or older and blind (other spouse) and has a gross income of at least: $12,600

• 65 or older and blind (both spouses) and has a gross income of at least: $13,300

Head of Household

• Under 65 and has a gross income of at least: $9,000

• 65 or older or blind and has a gross income of at least: $9,850

• 65 or older and blind and has a gross income of at least: $10,700

Important: You must file a Kansas Individual Income Tax return to receive any refund of taxes withheld, regardless of the amount of total income, or to receive the Food Sales Tax refund.

Minor Dependents

A minor child claimed on another person’s return can claim a standard deduction of $500 or the amount of their earned income (wages) up to $3,000, whichever is greater. Unearned income (such as interest and dividends) over $500 is taxable to Kansas and a Kansas return must be filed. If the taxable income (line 7, Form K-40) is zero, a return is not required. However, you must file a Kansas individual income tax return to receive any refund of taxes withheld, regardless of the amount of total income.

Nonresidents

If you are not a resident of Kansas, but you received income from Kansas sources, you must file a Kansas return regardless of the amount of income received from Kansas sources (see definition of Kansas source income).

If your employer withheld Kansas taxes from your wages in error, you must also file a Kansas return in order to receive a refund, even though you had no income from Kansas sources. A letter from your employer on company letterhead and signed by an authorized company official explaining the error must accompany your return. The letter must state the amount of wages and withholding applicable to Kansas.

Part-Year Residents

You are considered a part-year resident of Kansas if you were a Kansas resident for less than 12 months during the tax year. As a part-year resident, you have the option to file your Kansas return either as a resident or as a nonresident.

Military Personnel

The active and reserve duty service pay of military personnel is taxable only to your state of legal residency, no matter where you are stationed during the tax year. If your home of record on your military records is Kansas, and you have not established residency in another state, you are still a Kansas resident and all of your income, including your military compensation, is subject to Kansas income tax.

If you are a nonresident of Kansas but are stationed in Kansas due to military orders, you must file a Kansas return if you (or your spouse if filing jointly) received income from Kansas sources. Only income from Kansas sources is used to determine the Kansas income tax due for nonresident military service members. Nonresident service members will subtract out the amount of their military compensation on Schedule S, line A13.

Note: Kansas law provides that if a husband or wife is a resident of Kansas while the other is a nonresident of Kansas, and file a Married Filing Joint federal return, they must file a Married Filing Joint Kansas return and file as "nonresidents" of the state of Kansas.

Native American Indians

Income received by native American Indians that is exempt from federal income tax is also exempt from Kansas income tax. Income earned on a reservation, by a native American Indian residing on his/her tribal reservation, is also exempt from Kansas income tax. If any such income is included in the federal adjusted gross income, it is subtracted on Schedule S. line A17.

When to File

If your 2007 return is based on a calendar year, it must be filed and the tax paid no later than April 15, 2008. If your return is based on a fiscal year, your Kansas return is due the 15th day of the 4th month following the end of your fiscal year. The instructions in this booklet assume a calendar year taxpayer.

By using an electronic file and pay option, you can file your return at any time and choose to have your bank account debited on the due date of the return. See instructions for the direct payment option.

Amended Returns: In general, amended returns must be filed with the Department of Revenue within three (3) years of when the original return was filed. If the amended return will result in a refund to you, the amended return may be filed within three (3) years of when the original return was filed, or within two (2) years from the date the tax was paid, whichever is later.

Where to File

Please use the pre-addressed envelope in this tax booklet to mail your tax return. This envelope is designed for use in our automated mail-opening equipment and will expedite the processing of your return. If you are expecting a refund, place an "X" in the box on the front of the envelope. If your envelope has been misplaced, mail your return to the following address:

Individual Income Tax/Food Sales Tax
Kansas Department Of Revenue
915 SW Harrison St.
Topeka, KS 66699-1000

If You Need Forms

Due to the sensitivity of KDOR’s imaging equipment for tax return processing, only an original preprinted form or an approved computer-generated version of the K-40, Schedule S, and K-40V should be filed.

Extension of Time to File

If you are unable to complete your Kansas return by the filing deadline, you may request an extension of time to file. If you filed Form 4868 with the Internal Revenue Service for an automatic extension to file, enclose a copy of this form with your completed Form K-40 to automatically receive an extension to file your Kansas return. Kansas does not have a separate extension request form. (If you are entitled to a refund, an extension is not required to file the return after the original due date.)

To pay the tax balance due for an extension, use the Kansas Payment Voucher (K-40V). Check the box on the K-40V indicating extension payment. If you do not pay the tax due (may be estimated) by the original due date, you will owe interest and penalty on any balance due.

Important: An extension of time to file is "not" an extension to pay the tax.

Your Federal Return

If you file Form K-40 using a Kansas address, you do not need to include a copy of your federal return. However, keep a copy as it may be requested by the Department of Revenue at a later date. If your Form K-40 shows an address other than Kansas, you must enclose a copy of your federal return (1040EZ, 1040A or 1040 and applicable Schedules A-F) with your Kansas return.

Confidential Information

Income tax information disclosed to the Kansas Department of Revenue, either on returns or through department investigation, is held in strict confidence by law. The Department of Revenue, Internal Revenue Service, and several other states have an agreement under which some income tax information is exchanged. This is to verify the accuracy and consistency of information reported on federal and Kansas income tax returns.

Innocent Spouse Relief

In those cases where husband and wife file as married filing joint for Kansas, and one spouse is relieved of federal liability by the IRS under 26 USC 6013(e) or 6015, he or she is also relieved of Kansas tax, penalty and interest. Innocent spouse relief is also provided in Kansas cases where such relief would have been provided on the federal level had there been a federal liability.

Estimated Tax

If you have self-employment income or other income not subject to Kansas withholding, you may be required to prepay your Kansas income tax through estimated tax payments. Estimated tax payments are required if your:

• Kansas income tax balance due (after withholding and prepaid credits) is $500 or more; and

• withholding and prepaid credits for the current tax year are less than:

  1. 90% of the tax on your current year's return or

  2. 100% of the tax on your prior year's return.

  To make estimated tax payments, obtain Form K-40ES, the Kansas estimated tax vouchers and instructions.

Note: If two-thirds of your income is from farming or fishing, you are not required to make estimated tax payments – but your return must be filed and your tax paid on or before March 1, 2008.

Underpayment Penalty: If line 29 minus line 18 of Form K-40 is at least $500 and is more than 10% of the tax on line 17 of Form K-40, you may be subject to a penalty for underpayment of estimated tax. Use Schedule K-210, to see if you will have a penalty or if you qualify for one of the exceptions to the penalty.

Amending Your Return

You must file an amended Kansas return when: 1) an error was made on your Kansas return, 2) there is a change (error or adjustment) on another state’s return, 3) there is a change (error or adjustment) on your federal return. Check the "Amended" box in the Filing Information section of the K-40 if you are amending your 2007 Kansas return.

Pay the full amount of tax and interest due on an amended return and no late pay penalty will be assessed. Refer to the department's Web site www.ksrevenue.org for annual interest rates.

Amended Federal Return: If you are filing an amended federal income tax return, Form 1040X, for the same taxable year as this amended return, you must enclose a complete copy of the amended federal return and full explanations of all changes made on your amended Kansas return. If your amended federal return is adjusted or disallowed, it is necessary to provide the Department of Revenue with a copy of the adjustment or denial letter.

If you did not file a Kansas return when you filed your original federal return, and the federal return has since been amended or adjusted, use the information on the amended or adjusted federal return to complete your original Kansas return. A copy of both the original and amended federal returns should be enclosed with the Kansas return along with an explanation of the changes.

Note: If you filed a Schedule S with your original return, then you must file a Schedule S with your amended return, even if there are no amended changes to the Schedule.

Federal Audit: If you know that a previously filed federal return was not correct, or if your original return was adjusted by the Internal Revenue Service, amended returns or copies of the Revenue Agent’s Reports must be submitted within 180 days of the date the federal adjustments are paid, agreed to, or become final, whichever is earlier. Failure to properly notify the Director of Taxation within the 180 day period will cause the statute of limitations to remain open (Department of Revenue could make assessments for as many years back as necessary).

Deceased Taxpayers

If you are the survivor or representative of a deceased taxpayer, you must file a return for the taxpayer who died during the calendar year.

If you are a surviving spouse filing a joint federal income tax return, a joint Kansas return must also be filed. Include the decedent's Social Security number in the space provided in the heading of the return. Be sure the appropriate box below the heading has been checked.

Decedent Refund Documentation

If you are a surviving spouse requesting a refund of less than $100, you must enclose one of the following with your Form K-40:

• Federal Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer

• Death certificate

• Obituary statement

• Funeral home notice

• Letters Testamentary

• Kansas Form RF-9, Decedent Refund Claim

If you are a surviving spouse requesting a refund of over $100, or if a refund of any amount is being requested by someone other than the surviving spouse, you must submit with your Form K-40:

• Proof of death (death certificate, obituary statement or funeral home notice), and

• Kansas Form RF-9, Decedent Refund Claim

Food Sales Tax Refund

Form K-40 is not only a Kansas income tax return, but also the claim form for the food sales tax refund. This program offers a refund of the sales tax paid on food. To qualify, you must be 55 years of age or older, or be blind or disabled, or have a dependent child under 18 who lived with you all year whom you claim as a personal exemption. You must also be a Kansas resident (residing in Kansas the entire year) whose Kansas qualifying income is $29,700 or less (see results from Qualifying Income Worksheet. The refund is claimed on line 25 of Form K-40. The food sales tax refund will either increase the amount of your income tax refund or decrease the amount you owe.

All returns requesting a food sales tax refund must be received by the department not later than April 15th or within the federal extension period. Failure to file for a food sales tax refund before October 15th will result in a denial of the refund. The Director of Taxation may extend the time for filing any claim when good cause exists, or accept a claim filed after the deadline for filing in the case of sickness, absence or disability of the claimant if such claim has been filed within four years of such deadline.

Note: If you filed a Kansas income tax return last year, you can use "WebFile" to claim your food sales tax refund and get it fast! See WebFile for more information.

Homestead Refund Program

This program offers a property tax rebate of up to $700 for homeowners and renters. To qualify, the claimant must be a Kansas resident (residing in Kansas the entire year) whose 2007 household income was $29,100 or less, and who is over 55 years old, or is blind or disabled, or has a dependent child under 18 who lived with them all year. "Household income" is generally the total of all taxable and nontaxable income received by all household members.

This rebate is claimed on Kansas Form K-40H, Kansas Homestead Refund Claim. This form and instructions are available from our Taxpayer Assistance Center, your county clerk's office, and other places of convenience throughout the state, or by calling our voice mail forms request line: (785) 296-4937.

Line-by-Line Instructions

Taxpayer Information

Label: If you have a pre-addressed label (located on the back cover of the Kansas Individual Income Tax & Food Sales Tax Refund booklet) and the name and address information is correct, place it on your Form K-40 in the space provided after you have completed your return.

Name and Address: If you do not have a pre-addressed label, or if the information on the label is incorrect, enter your name and address in the spaces provided. Be sure to include your apartment or lot number, if applicable, to assure delivery of your refund or correspondence.

School District and County: Residents — Using the List of Kansas Unified School Districts and County Abbreviations, enter your school district and county abbreviation for where you resided on December 31, 2007. Nonresidents — Leave these boxes blank.

Name or Address Change Box: If your name or address has changed since your last Kansas return was filed, mark an "X" in the box below the name and address area.

Deceased Taxpayer Box: If the taxpayer (or spouse, if filing a joint return), died during 2007, mark an "X" in the appropriate box below the name and address area.

First Four Letters of Last Name: Using all capital letters, enter the first four letters of your last name and that of your spouse in the boxes provided. If your last name has less than four letters, leave the remaining box(es) empty.

Social Security Number (SSN): You must enter the SSN(s) in the boxes on your return. To maintain the confidentiality of your tax information, SSNs are not printed on your label.

Telephone Number: Should a problem arise in processing your return, it is helpful if we have a telephone number where you can be reached during our office hours. It will be kept confidential.

Filing Information

Filing Status: Your Kansas filing status must be the same as your federal filing status. If your federal filing status is Qualifying Widow(er) with Dependent Child, check the Head of Household box.

If you and your spouse file a joint federal return, you must file a joint Kansas return, even if one of you is a nonresident. If you and your spouse file separate federal income tax returns, you must file separate Kansas returns.

Amended Return. If you are filing an amended return for tax year 2007, place an "X" in the Amended box and in the appropriate sub-box indicating the reason you are filing an amended return.

Important: If you are filing an amended return, you cannot change the filing status from "joint" to "separate" after the due date has passed for filing a separate return (April 15th for calendar year taxpayers).

Residency Status: Check the appropriate box for your residency status (see Who Must File a Return).

If you and your spouse file a joint Federal Income Tax return and one of you is a nonresident of Kansas, you must file a joint nonresident Kansas return.

Exemptions: Enter the number of exemptions claimed on your federal return. If your filing status is "Head of Household," you are allowed an additional exemption on your Kansas return; enter a "1" in the box provided. Enter the total number of exemptions in the "Total Kansas exemptions" box. Important: If you are claimed as a dependent by another taxpayer, enter "0" in the "Total Kansas exemptions" box.

Food Sales Tax Refund

To qualify for a refund of sales tax paid on food purchases, you must meet the qualifications for residency, taxpayer status, and qualifying income.

Residency: You must been domiciled in Kansas for the entire 12 months of 2007. To be "domiciled in Kansas" means you have established a permanent residence in Kansas and intend to remain in Kansas. If you resided in Kansas less than 12 months of 2007, you do not qualify for the Food Sales Tax refund, even if your filing status shown on Form K-40 is "Resident."

Taxpayer Status: If you meet the Residency qualification above, answer these questions:

1.	Were you 55 years of age or older during 2007 (born prior to January 1, 1953)?	[  ] Yes	[  ] No
2.	Were you totally and permanently disabled or blind during 2007 (regardless of age)?	[  ] Yes	[  ] No
3.	Did you have a dependent child who lived with you the entire year, was born before January 1, 2007, and was under the age of 18 all of 2007?	[  ] Yes	[  ] No

If you answered "Yes" to one or more of these questions, you meet the taxpayer status qualification.

Qualifying Income: The income limit for a food sales tax refund is $29,700. If you met the first two qualifications, complete the Qualifying Income Worksheet for the Kansas Food Sales Tax Refund.

If you meet all of the qualifications for residency, taxpayer status, and qualifying income, complete Form K-40 — or for a faster refund, use WebFile.

Income

Important: If the amounts on lines 1, 2, or 3 are negative numbers, be sure to shade the minus (-) in the box to the left of the negative number.

Line 1 — Federal Adjusted Gross Income

Enter on line 1 your federal adjusted gross income as reported on your 2007 federal income tax return.

Line 2 — Modifications to Federal Adjusted Gross Income

Many taxpayers will not have any modifications. If you do not have any modifications, skip line 2 and enter the amount from line 1 on line 3.

However, if you have income that is taxable at the federal level but not taxable to Kansas, or have income that is exempt from federal taxation but taxable to Kansas, you must complete Part A of Schedule S. Review the instructions for Schedule S, Part A to determine if you have any modifications to your federal adjusted gross income.

Line 3 — Kansas Adjusted Gross Income

If line 2 is a positive amount, add lines 1 and 2 and enter the total on line 3. If line 2 is a negative amount (be sure to shade the minus (-) in the box to the left of the amount), subtract line 2 from line 1 and enter the result on line 3.

Note:If the amount on line 3 is $29,700 or less, you may qualify for the food sales tax refund. Review the qualifications for the food sales tax refund and the qualifying income worksheet.

Deductions

Line 4 — Standard or Itemized Deductions

If you did not itemize your deductions on your federal return, you must take the standard deduction on your Kansas return. If you itemized your deductions on your federal return, you may either itemize on your Kansas return (by completing Itemized Deduction Worksheet I or Itemized Deduction Worksheet II) or take the Kansas standard deduction, whichever is to your advantage.

If you are married and file separate returns, you and your spouse must use the same method of claiming deductions. If one of you itemize your deductions, then the other must also itemize.

Kansas Standard Deduction

Enter your Kansas standard deduction from the applicable chart or worksheet that follows.

If you can be claimed as a dependent by another taxpayer and line 1 of Form K-40 includes income other than earned income, you must use the Standard Deduction for Dependents worksheet.

Chart I — Standard Deduction Chart for Most People

Do not use this chart if you are 65 or older or blind, or if someone can claim you as a dependent.

Chart II — Standard Deduction Chart for People 65 or Older and/or Blind

If someone can claim you as a dependent, use the Standard Deduction Worksheet for Dependents.

Total Number of boxes checked ________

Standard Deduction Worksheet for Dependents

Use this worksheet only if someone can claim you as a dependent.

Kansas Itemized Deductions

You may itemize your deductions on your Kansas return only if you itemized your deductions on your Federal return.

If you elect, on your federal return, to deduct state and local general sales and use taxes instead of state and local income taxes then your Kansas itemized deductions are the same as your federal itemized deductions. If you deduct income taxes on your federal return, use one of the two worksheets below to calculate your Kansas itemized deductions.

Itemized Deduction Worksheet I

Federal Adjusted Gross Income of $156,400 or Less
($78,200 or less if married filing separately)

* Federal line number references are subject to change

Itemized Deduction Worksheet II

Federal Adjusted Gross Income Over $156,400
(Over $78,200 if married filing separately)

Refer to your federal itemized deductions worksheet, in your federal 1040 instruction book, not the Federal Schedule A.

*Federal line number references are subject to change

Line 5 — Exemption Allowance

Multiply the total number of exemptions claimed on Form K-40 by $2,250. Important: If you are claimed as a dependent by another taxpayer, enter "0" on line 5.

Line 6 — Total Deductions

Add lines 4 and 5. Enter the total on line 6.

Line 7 — Taxable Income

Subtract line 6 from line 3. Enter the result on line 7. If line 7 is less than zero, enter "0".

Tax Computation

Line 8 — Tax

If line 7 is $50,000 or less, use the Tax Tables in your booklet to find the amount of your tax.

[Please note: Tax Tables are not included in the online instructions.]

If line 7 is more than $50,000, you must use the Tax Computation Schedules to compute your tax. If you are married filing jointly, use Schedule I. All others will use Schedule II.

Important:

Residents — If you are filing as a resident, skip lines 9 and 10 and go to line 11.

Nonresidents — If you are filing as a nonresident, you must complete Part B of Schedule S. Follow the Part B instructions.

Line 9 — Nonresident Allocation Percentage

Enter the percentage from Schedule S, Part B, line B23.

Line 10 — Nonresident Tax

Multiply line 8 by the percentage on line 9 and enter the result on line 10.

Line 11 — Kansas Tax on Lump Sum Distributions

If you received income from a lump sum distribution and there was a federal tax imposed on this income in accordance with federal Internal Revenue Code Section 402(e), then you are subject to Kansas tax on your lump sum distribution.

If you are a resident, enter 13% of the federal tax on your lump sum distribution (determined on federal Form 4972) on line 11.

If you are a nonresident, leave line 11 blank.

Note: If you are paying a federal tax on a lump sum distribution received from the Kansas Public Employees’ Retirement System (KPERS), prorate the federal tax. Divide the Kansas taxable portion of the distribution (accumulated interest plus any contributions made since July 1, 1984, that have not been previously added back on your Kansas income tax returns) by the total portion of the distribution.

Line 12 — Total Kansas Tax

If you are filing this return as a resident, add lines 8 and 11 and enter the result on line 12.

If you are filing this return as a nonresident, enter the amount from line 10 again on line 12.

Credits

Line 13 — Credit for Taxes Paid to Other States

If you paid income tax to another state, you may be eligible for a credit against your Kansas tax liability. If you had income from a state that has no state income tax, make no entry on line 13 and go to line 14.

Important: To receive a credit for taxes paid to another state, you must enclose a copy of the other state(s) tax return and supporting schedules with Form K-40. Copies of the other state’s W-2 forms are not acceptable. If claiming a foreign tax credit, and you were required to complete federal Form 1116, enclose a copy with your Kansas return.

Foreign Tax Credit: As used in this section, "state" means any state of the United States, District of Columbia, Puerto Rico, any territory or possession of the United States and any foreign country or political subdivision of a foreign country. The Kansas credit for foreign taxes is first limited to the difference between the actual tax paid to the foreign country and the foreign tax credit allowed on your federal return.

If you claimed the foreign tax paid as an itemized deduction on your federal return, no credit is allowed in this section.

Foreign Tax Credit Worksheet

Taxes Paid to Other States by Kansas "Residents": If you are a Kansas resident you may claim this credit if:

• Your total income on line 1 includes income earned in the other state(s); and

• 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 following "Worksheet for Residents." Complete the tax return(s) for the other state(s) before using this worksheet.

If you paid taxes to more than one state, complete a worksheet for each state, combine the results, and enter the total on line 13, Form K-40.

Worksheet for Residents

Taxes Paid to Other States by "Nonresidents": If you are filing as a nonresident of Kansas you may claim this credit if:

• You were a Kansas resident for part of the year,

• Your total income reported to Kansas includes income earned in the other state while you were a Kansas resident, and

• You were required to pay taxes on that other state's income.

Complete the "Worksheet for Nonresidents" to determine your credit. If the credit is based on taxes paid to more than one state, complete a worksheet for each state, combine the results, and enter the total on line 13, Form K-40.

Worksheet for Nonresidents

Line 14 — Credit For Child And Dependent Care Expenses

This credit is available to residents only. Nonresidents are not eligible for this credit.

Multiply the amount of credit allowed against your federal income tax liability on your federal return (from federal Form 2441) by 25%. Enter the result on line 14.

Line 15 — Other Credits

Enter on line 15 the total of all other tax credits for which you are eligible. You must complete and enclose with your Form K-40 the appropriate schedule to claim any of the following credits:

Line 16 — Total Tax Credits

Add lines 13, 14, and 15 and enter the result on line 16.

Line 17 — Balance

Subtract line 16 from line 12 and enter the result. (If the result is zero or a negative amount, enter "0" on line 17.)

Line 18 — Consumers' Compensating Use Tax

Please refer to the explanation of Compensating Use Tax Liability for further information.

Enter on line 18 the compensating use tax due on purchases of items from retailers located outside of Kansas on which no sales tax was paid (including freight, shipping or handling fees).

If you made untaxed out-of-state purchases, but do not know the amount of those purchases, use the following chart to estimate the compensating use tax for calendar year 2007.

Adjusted Gross Income Chart for Use Tax Computation

Find your Kansas adjusted gross income in the chart and enter the use tax indicated on line 18 of Form K-40. For example, if the Kansas adjusted gross income on line 3 is $32,000, you would enter $25 on line 18 of Form K-40.

$75,000 and over – multiply the amount on line 3 of Form K-40 by .068% (.00068) and round to the nearest whole dollar.

Important: An entry is required on line 18. If no untaxed out-of-state purchases were made or you did not live in Kansas during 2007, enter a zero on line 18. If you are currently registered to report and remit Kansas compensating use tax, continue to do so on Form CT-10U, Compensating Use Tax Return, and enter a zero on line 18.

Line 19 — Total Tax Balance

Add lines 17 and 18 and enter the result on line 19.

Withholding and Payments

Line 20 — Kansas Income Tax Withheld

Add the Kansas withholding amounts shown on your W-2 forms (also 1099s and K-19 forms, if applicable). Enter the total on line 20. The Department of Revenue does not require that you enclose copies of W-2s or 1099s with Form K-40, but reserves the right to request them at a later date. You must, however, enclose any K-19 forms with your Form K-40.

If you have not received a W-2 form from your employer by January 31, or if the form you received is incorrect or not legible, contact your employer.

Line 21 — Estimated Tax Paid

Enter the total of your 2007 estimated tax payments plus any 2006 overpayment you had credited forward to 2007.

Line 22 — Amount Paid With Kansas Extension

Enter the amount paid with your request for an extension of time to file.

Line 23 — Earned Income Credit

This credit is available to residents only. Nonresidents are not eligible for this credit.

Multiply the amount of credit allowed on your federal return by 17%. You may choose to have the IRS compute your federal earned income credit. If you do not receive the information from the IRS before the deadline for filing your Kansas return you should complete Form K-40 without the credit, and be sure to pay any amount you owe. Once the IRS sends you the completed earned income credit figures, you may then file an amended Kansas return to claim the credit. See Amending Your Return.

Line 24 — Refundable Portion of Tax Credits

Enter the total refundable portion of these credits:

Line 25 — Food Sales Tax Refund

Refer to the qualifications for this credit. If you meet all the qualifications enter the amount of the refund on line 25.

To compute your food sales tax refund, you will need the number of exemptions in the "Total Exemptions" box on the front of Form K-40, and your qualifying income amount from line 30 Qualifying Income Worksheet.

If your qualifying income on line 30 of the worksheet is:

Line 26 — Cash Remitted on Original Return

Use this line only if you are filing an amended K-40 for the 2007 tax year. Enter the amount of money you remitted to the Kansas Department of Revenue with your original 2007 return.

Line 27 — Overpayment from Original Return

Use this line only if you are filing an amended K-40 for the 2007 tax year. Enter the amount of overpayment shown on your original return. Since you were refunded this amount or it was credited forward, this amount is a subtraction entry.

Line 28 — Total Refundable Credits

Add lines 20 through 26 and subtract line 27; enter the result on line 28.

Balance Due

Line 29 — Underpayment

If your tax balance on line 19 is greater than your total credits on line 28, enter the difference on line 29.

Late Charges

If the amount on line 29 is not paid by the due date, penalty and interest will be added according to the rules outlined in lines 30 and 31.

Extension of Time to File Your Return: Interest is due on any delinquent tax balance, even if you have been granted an extension of time to file the return. If 90% of your tax liability is paid on or before the original due date of your return, an automatic extension is applied and no penalty is assessed.

Line 30 — Interest

Compute interest at 0.75% for each month (or fraction thereof) from the original due date of the return on the amount on line 29.

Line 31 — Penalty

Compute penalty at 1% per month (or fraction thereof) from the original due date of the return on the amount on line 29. The maximum penalty is 24%.

Line 32 — Estimated Tax Penalty

If the amount on line 29 minus line 18 is at least $500 and is more than 10% of the tax on line 17 is $500, you may be subject to an estimated tax penalty. To determine if you have a penalty, complete Schedule K-210. If you have a penalty on Schedule K-210, enter the amount on line 32. If the amount on line 29 minus the amount on line 17 is $500 or more, you may not be subject to an estimated tax penalty if you meet one of the two exceptions: 1) if your withholdings and/or estimated payments (lines 20 & 21) equal or exceed 100% of the prior year’s tax liability (line 17 from last year’s return) or, 2) if your withholdings and/or estimated payments (lines 20 & 21) equal or exceed 90% of this year’s income tax liability (line 17).

Important: If at least two-thirds of your income is from farming or fishing, mark an "X" in the box on line 32.

Line 33 — Amount You Owe

Add lines 29 through 32 and enter the total on line 33. This amount should be paid in full with the return. A balance due of less than $5 need not be paid. You may make a donation to any or all of the contribution programs on lines 36 through 39, even if you have a balance due. Just add these amounts to your tax and write one check for the total of tax due and your contribution(s).

The Department of Revenue offers the following three options to pay your Kansas tax:

Credit Card. To pay by credit card, contact one of the service providers listed here. A convenience fee will be charged by the service provider based on the amount of tax you are paying.

Official Payments Corporation
1-800-2PAYTAX (1-800-272-9829)
www.officialpayments.com

Link2Gov
1-888-KS-Taxes (1-888-578-2937)
www.kstaxpayment.com

Direct Payment. If you choose WebFile or IRS e-File to file your Kansas return, Direct Payment is an option during the filing process to pay your balance due. If you file a paper return you also have the option to make an electronic payment by calling the Department of Revenue toll-free at 1-866-450-6490 or visit https://www.kdor.org/personaltax/mainpage.aspx for an on-line transaction.

When you select Direct Payment, and provide your bank routing number and bank account number, you are authorizing the department to initiate an electronic payment from your account for payment of your balance due. Direct Payment allows you to "file now, pay later." For example, if you file your return on February 20th and elect Direct Payment, you may choose to have your bank account debited on the April 15th due date.

With Direct Payment, you are also assured that your payment is made on time. Direct payment authorizations on returns filed by midnight of April 15th are considered to be timely paid.

Direct Payment saves time – no check to write and no K-40V voucher to complete and mail. If you need to revoke your election of this payment authorization, you must notify the department at 1-800-525-3901 by 4:00 PM; two business days before the scheduled payment date.

Important: You should check with your financial institution to be sure they allow an electronic debit (withdrawal) from your account.

Check or Money Order. If you choose this payment option, you must complete and submit Form K-40V with your payment. Write your Social Security number on your check or money order and make it payable to "Kansas Income Tax." If you are making a payment for someone else (i.e., daughter, son, parent), write that person's name and Social Security number on the check. Do not send cash. Do not staple or tape your payment to the Form K-40V or Form K-40. Instead, enclose it loosely with your return.

Returned checks: A fee of $30.00, plus costs for a registered letter (currently $9.31), is charged on all returned checks.

Refund

Line 34 — Overpayment

If your tax balance, line 19, is less than your total credits, line 28, enter the difference on line 34. Note: An overpayment of less than $5 will not be refunded, but may be carried forward as a credit to next year's return (line 35), or contributed to any of the contribution programs on lines 36 through 39.

Line 35 — Credit Forward

Enter the portion of line 34 you wish to have applied to your 2008 Kansas estimated income tax (must be $1 or more).

If the amount on line 34 is less than $5, you may carry it forward to 2008 as an additional credit even if you do not make estimated tax payments.

You may make voluntary contributions to any of the tax deductible programs/funds listed on Lines 36 through 39 of Form K-40 – see the following instructions. Your contribution(s) will reduce your refund or increase the amount you owe.

Important: Examination Adjustment. If your overpayment is decreased due to an adjustment to your return, any contributions you have made will be reduced by that amount. If your overpayment is increased, your contribution amount(s) will remain the same.

Line 36 — Chickadee Checkoff Program

Contributions to the Kansas Nongame Wildlife Improvement program will help improve the quality of wildlife in Kansas. Last year?s contributions were used to:

• Initiate a statewide mammals atlas to update critical information for sensitive mammal populations for sensitive species evaluations and recovery.

• Support the Kansas Nature-based Tourism Alliance and NaturalKansas Web site.

• Monitor bald eagle populations and nesting success.

• Perform recovery plans for state endangered species.

• Continue research on declining aquatic animals in southeast Kansas and restore some species.

• Sponsor the Kansas winter birdfeeder survey.

• Coordinate the Kansas Bluebird Program.

• Help support the (OWLS) Outdoor Wildlife Learning Sites for schools.

Enter on line 36 the amount you wish to contribute to this program (must be $1 or more).

Line 37 — Senior Citizens Meals on Wheels Contribution Program

All contributions are used solely for the purpose of providing funds for the Senior Citizens Meals On Wheels Contribution Program. The meals are prepared by a dietary staff and are delivered by volunteers. The underlying objective of the program is to prevent deterioration of the elderly and handicapped individuals in the community, thus making it possible for them to live independently in their own homes for as long as possible. The friendly visit with the volunteers is socially helpful and the daily visit is important in case of an emergency situation.

Enter on line 37 the amount you wish to contribute to this program (must be $1 or more).

Line 38 — Breast Cancer Research Fund

The mission of the University of Kansas Cancer Center is to bring the best cancer prevention, diagnosis, and treatment to the people of Kansas. The Breast Cancer Research Fund was created to support research related to the prevention, diagnosis and treatment of breast cancer with hope of ending suffering and death caused by this disease.

Enter on line 38 the amount you wish to contribute to this fund (must be $1 or more).

Line 39 — Military Emergency Relief Fund

Contributions will be used to help military families with the cost of food, housing, utilities and medical services incurred while a member of the family is on active military duty.

Enter on line 39 the amount you wish to contribute to this fund (must be $1 or more).

Line 40 — Refund

Add lines 35 through 39 and subtract the result from line 34. This is your refund amount. If line 40 is less than $5, it will not be refunded, however, you may carry it forward to be applied to your 2008 Kansas income tax liability (enter the amount on line 35). If you do carry it forward, please remember to claim it as an estimate payment on line 21 of the 2008 return. You also have an option to apply it to one of the contribution programs/funds (lines 36 through 39 of Form K-40).

If you file a paper return, you will need to allow 8 weeks from the date you mail it to receive your refund. Errors, inaccurate forms, photocopied forms, or incomplete information will delay processing even longer. For a fast refund – 7 days or less – file your return electronically! See IRS e-File for details.

Refund Set-off Program: Kansas law provides that if you owe any delinquent debt (Kansas tax, child support, student loans, etc.) to a Kansas state agency, municipality, municipal court or district court, your income tax refund will be applied (set-off) to that delinquent debt. The set-off process will cause a 10 to 12 week delay to any remaining refund.

Signature

Your income tax return must be signed. You will not receive your refund if you return is not signed. Both taxpayers must sign a joint return even if only one had income. If the return is prepared by someone other than you, the preparer should also sign in the space provided.

If you are filing a return on behalf of a decedent, the return should be signed by the executor/executrix. If it is a joint return filed by the surviving spouse, indicate on the spouse’s signature line "Deceased" and the date of death. If a refund is due, enclose the required documents (see instructions for Deceased Taxpayers on page 13). (see instructions for Deceased Taxpayers).

Preparer Authorization Box

In some cases it may be necessary for the Department of Revenue to contact you about your tax return. By marking the box above the signature line, you are authorizing the director or director’s designee to discuss your tax return and any enclosures with your tax preparer.

Mailing Your Return

Before mailing your return, please be sure:

• you have completed all required information on the return.

• your numbers are legible in each box.

• you have enclosed, but not attached, all K-19 forms.

• you have enclosed Schedule S if you have a modification on line 2 of Form K-40 or if you filed as a nonresident or part-year resident.

• you have completed and enclosed Form K-40V if you are making a tax payment.

• you signed your return.

Important: If you file Form K-40 using a Kansas address, do not include a copy of your federal return. However, keep a copy as it may be requested by the department at a later date. If your Form K-40 shows an address other than Kansas, you must enclose a copy of your federal return (1040EZ, 1040A or 1040 and applicable Schedules A-F) with your Kansas return.

2007 Tax Computation Schedules

You must use the Tax Computation Schedules if your taxable income is $50,000 or more.

Important: Be sure to use the proper schedule when computing tax.

Schedule I — Married Filing Joint

Schedule II — Single, Head of Household, or Married Filing Separate

Compensating Use Tax Liability

What is Compensating Use Tax?

Since 1937, Kansas has imposed a compensating use tax on goods and merchandise purchased from outside Kansas and used, stored or consumed in Kansas. Its purpose is to protect Kansas retailers from unfair competition from out-of-state retailers who sell goods tax-free by applying a tax on these items equal to the Kansas sales tax rate. It also helps to assure fairness to Kansans who purchase the same items in Kansas and pay Kansas sales tax on them.

Individuals and businesses buying items from retailers in other states may be subject to Kansas use tax on those purchases. The use tax applies to the total cost of the merchandise, including postage, shipping, handling or transportation charges. The use tax rate is the same as the combined state and local sales tax rate in effect where the buyer takes delivery in Kansas. For individuals, this is usually our home. For businesses, it will be the office, shop, job site, etc. where the item(s) are used.

Do You Owe Use Tax?

Individual Kansans that buy goods in other states or through catalogs, mail-order companies, over the Internet or from TV, magazine and newspaper ads must pay Kansas use tax on these purchases if the seller does not charge a Kansas tax equal to the Kansas Retailers' Sales Tax rate in effect where the item(s) will be used, stored or consumed.

Example: A Topeka, KS resident orders a computer from a company in New York over its Web site. Total cost for the computer is $2,000 plus $10 shipping. The Topeka resident will owe 7.45% (current Topeka sales tax rate) Kansas use tax on the total cost of $2,010. $2,010 X .0745 = $149.75.

Example: You call a toll-free number and place an order for gifts and food items. The items are shipped to your Kansas address and no tax is charged on the order. You will owe Kansas use tax on the total cost of these items since you would have had to pay Kansas sales tax on them had they been purchased from a Kansas retailer.

Kansas businesses also owe use tax on items on which they are the final consumers — equipment, fixtures, office supplies and other non-inventory items purchased for their business. When these items are purchased from a Kansas retailer, Kansas sales tax is paid to the retailer. When they are purchased from an out-of-state retailer without Kansas tax, the Kansas use tax must be paid directly to the Kansas Department of Revenue, at a rate equal to the combined state and local sales tax rate where the business takes delivery in Kansas.

Example: A Garden City, KS clothing store orders garment racks from a vendor in St. Louis for $500 plus $25 shipping charge. There is no sales tax on the invoice. The Garden City store will owe Kansas Consumers’ Compensating Use Tax equal to the Garden City sales tax rate (currently 7.45%) on the total cost of these fixtures. $525 X .0745 = $39.11.

How to Pay Use Tax

Individuals — Complete line 18, Form K-40

To pay the Kansas use tax on your untaxed out-of-state purchases by mail, internet, etc., during calendar year 2007, please consult the instructions for line 18. You may either use the chart, or compute the tax due by applying the state and local tax rate in effect for your address to the total purchases subject to the tax.

Don't know your sales tax rate? Go on-line at www.ksrevenue.org and select the "Kansas Sales and Use Tax Locator" under the "Your Business" section.

If you have any questions about use tax or about your responsibilities for reporting and paying this tax as an individual Kansas consumer, please contact our office at (785) 368-8222.

Businesses — Obtain a Use Tax Reporting Number

Kansas businesses buying equipment, fixtures, tools, supplies and other taxable items for their business must register with the department and file separate use tax returns. There is no use tax reporting on Kansas income tax forms K-41 (Fiduciary Income Tax), K-120 (Corporation Income Tax) and K-120S (Partnership or S Corporation Income Tax) or K-130 (Privilege Tax).

To obtain a use tax reporting number, simply complete the Business Tax Application, Form CR-16, available from our Web site, office, or forms request line. The department will assign a reporting number and will periodically (quarterly returns for most taxpayers) send you the use tax returns (Form CT-10U) on which to report your taxable purchases and pay the use tax due. If your estimated use tax liability for a calendar year is less than $80, you will only file one use tax return for the entire calendar year. Paperless filing and payment options are also available through our Online Business Center at www.webtax.org.

More information about use tax for businesses, including a sample completed use tax return, is in our Publication KS-1510, Kansas Sales and Compensating Use Tax, available from our Web site or office.

Taxpayer Assistance

By Phone

If you have a question about completing your Kansas Individual Tax return, call (785) 368-8222 to speak to a customer representative.

If you prefer, you may fax information to 785-291-3614.

TTY Users Telecommunications Device for the Deaf use 785-296-6461

In Person

Assistance in completing your return is available from our Topeka office or from free volunteer tax assistance programs (VITA) by the Internal Revenue Service (IRS) and the American Association of Retired Persons (AARP). VITA and TCE sites can be found in community centers, libraries, churches, retirement homes, etc. For the site nearest you, call 1-800-829-1040, or visit your local IRS office. For the AARP Tax-Aide site nearest you, visit their Web site at www.aarp.org/taxaide/home.html, and enter your city, state and zip code or call 1-888-227-7669.

Taxpayer Assistance Center – 1st floor
Docking State Office Building
915 SW Harrison Street
Topeka, KS 66625-2007

The Department of Revenue office hours are 8:00 a.m. to 5:00 p.m., Monday through Friday.

Refund Information

You can check the status of your current year refund 24 hours a day/7 days a week from our Web site or by phone. You will need to provide the Social Security number(s) shown on your return and the expected amount of your refund. When you have this information, do one of the following:

• Go to www.ksrevenue.org, click on Your Personal, then click on Refund Status Online.

• Call 1-800-894-0318 for automated refund information and follow the recorded instructions.

Note: If you filed your return electronically, please allow the Department of Revenue 7 days to process your refund. If you filed a paper return, normal processing time is 4 to 8 weeks.

Request for Tax Forms — 785-296-4937

Tax forms can be found at many city and county clerk offices, banks, libraries, and other places of convenience or on our Web site at: www.ksrevenue.org. To obtain forms by mail, contact the Department of Revenue voice mail system at 785-296-4937. You will be asked to give your name, address, telephone number, and form(s) you desire. Please allow two weeks for delivery of your form(s).