Enacted on May 3, 2021, pursuant to a legislative override of the governor’s veto, S.B. 50 provides the following changes applicable for tax years beginning after December 31, 2020:
- 100% subtraction modification for GILTI and 163(j) disallowed interest,
- Decoupling from IRC Section 118 capital contribution changes enacted by the 2017 tax reform act (the 2017 Act), and
- Modifying business meal expense deductions
Additionally, for net operating losses incurred in tax years beginning after December 31, 2017, Kansas replaces its 10-year NOL carryforward with an unlimited carryforward.
Finally, Kansas extends the filing deadline for 2020 corporate income tax returns to be one month following the federal deadline.
Kansas taxpayers are being provided some immediate compliance relief with the additional month extension to file their 2020 corporate income tax returns. Taxpayers calculating their 2021 Kansas liability should also benefit from the state’s new subtraction modifications for GILTI and Section 163(j) provisions. In addition, while the legislation also provides that NOLs for tax years after December 31, 2017 will have an unlimited carryforward, net operating losses incurred before 2017 will continue to have a 10-year carryforward along with Kansas’ NOL carryback for unexhausted NOL carryforwards.