Kansas City earnings tax deduction for KS residents

[darcib55]

I work in Kansas City, MO but am a KS resident.  It does not appear Turbo Tax is giving me credit for my KC earnings tax on my KS return.  Do I need to manually adjust this figure?  Thanks.

[MichaelL1 · Accepted solution]

Yes, you will need to add the additional amount to the "Taxes paid to Another State" in the Credits section of the Kansas return.

It is a credit that is allowed by Kansas, and while most states only allow the State income tax as a credit, Kansas changed the law a few years ago to allow the City Earnings also, so add this amount to the State of Missouri Taxes you are paying for the credit. 

http://www.kansascity.com/news/politics-government/article31669076.html

[Kate71]

Is this still available for 2021 tax credit? Where do I find entry on Turbo Tax

[GeorgeM777]

The credit does not appear to be available for 2021.  Therefore, all Kansas City, Missouri, residents are required to pay the earnings tax, even if they work outside the city.  Nonresidents are required to pay the earnings tax on income earned within Kansas City, Missouri, city limits. The tax also applies to the net profits of businesses.

There is an exception to the earnings tax for military service members.  In this regard, for tax years beginning January 1, 2017 and after, military service pay is exempt from the earnings tax regardless of resident status or Home of Record.  Combat zone and hostile fire/ imminent danger pay are not subject to the earnings tax regardless of tax year, resident status or Home of Record.

Here is a link to a Kansas City, MO website which contains many FAQs regarding, among other things, the earnings tax.  

Kansas City, MO, FAQs 

@Kate71