Electing to participate in the federal tax credit for individual contributions to scholarship granting organizations and increasing the aggregate tax credit limit on the tax credit for low income students scholarship program.

Session of 2026
SENATE BILL No. 386
By Committee on Education
1-26
AN ACT concerning education; relating to federal tax credits for
contributions to scholarship granting organizations; electing to
participate in the federal tax credit for individual contributions to
scholarship granting organizations; relating to the tax credit for low
income students scholarship program; increasing the aggregate tax
credit limit; amending K.S.A. 2025 Supp. 72-4357 and repealing the
existing section.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. The state of Kansas hereby elects to participate in the
federal tax credit for contributions of individuals to scholarship granting
organizations pursuant to section 25F of the federal internal revenue code
of 1986, as amended, for all taxable years beginning after December 31,
2026. On behalf of the state of Kansas and in accordance with section 25F
of the federal internal revenue code of 1986, as amended, the state
treasurer shall annually provide to the secretary of the treasury or the
secretary's delegate any required information, including, but not limited to,
a list of the scholarship granting organizations that meet the requirements
described in section 25F of the federal internal revenue code of 1986, as
amended, and are located in the state of Kansas.
Sec. 2. K.S.A. 2025 Supp. 72-4357 is hereby amended to read as
follows: 72-4357. (a) (1) There shall be allowed a credit against the
corporate income tax liability imposed upon a taxpayer pursuant to the
Kansas income tax act, the privilege tax liability imposed upon a taxpayer
pursuant to the privilege tax imposed upon any national banking
association, state bank, trust company or savings and loan association
pursuant to article 11 of chapter 79 of the Kansas Statutes Annotated, and
amendments thereto, and the premium tax liability imposed upon a
taxpayer pursuant to the premiums tax and privilege fees imposed upon an
insurance company pursuant to K.S.A. 40-252, and amendments thereto,
for tax years commencing after December 31, 2014, and ending before
January 1, 2017, an amount equal to 70% of the amount contributed to a
scholarship granting organization authorized pursuant to K.S.A. 72-4351
et seq., and amendments thereto.
(2) There shall be allowed a credit against the tax liability imposed
upon a taxpayer pursuant to the Kansas income tax act, the privilege tax
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SB 386 2
liability imposed upon a taxpayer pursuant to the privilege tax imposed
upon any national banking association, state bank, trust company or
savings and loan association pursuant to article 11 of chapter 79 of the
Kansas Statutes Annotated, and amendments thereto, and the premium tax
liability imposed upon a taxpayer pursuant to the premiums tax and
privilege fees imposed upon an insurance company pursuant to K.S.A. 40-
252, and amendments thereto:
(A) For tax years commencing after December 31, 2016, and ending
before January 1, 2022 2023 , an amount equal to 70% of the amount
contributed to a scholarship granting organization authorized pursuant to
K.S.A. 72-4351 et seq., and amendments thereto; and
(B) for tax years commencing after December 31, 2022, an amount
equal to 75% of the amount contributed to a scholarship granting
organization authorized pursuant to K.S.A. 72-4351 et seq., and
amendments thereto.
(3)(2) In no event shall the total amount of contributions for any
taxpayer allowed under this subsection exceed $500,000 for any tax year.
(b) The credit shall be claimed and deducted from the taxpayer's tax
liability during the tax year in which the contribution was made to any
such scholarship granting organization.
(c) (1) Except as otherwise provided in this subsection, for tax year
2026 and each tax year thereafter, in no event shall the total amount of
credits allowed under this section shall not exceed $10,000,000
$20,000,000 for any one tax year.
(2) In each tax year commencing after December 31, 2026, the
secretary shall determine whether the total amount of credits claimed
pursuant to this subsection exceeds 75% of the aggregate credit limit
established pursuant to this subsection. If the secretary determines that the
total amount of credits claimed exceeds 75% of the aggregate credit limit,
such aggregate credit limit shall be increased by 25% for the succeeding
tax year, except that in no event shall such aggregate credit limit exceed
$30,000,000.
(3) Except as otherwise provided, the allocation of such tax credits
for each scholarship granting organization shall be determined by the
scholarship granting organization in consultation with the secretary, and
such determination shall be completed prior to the issuance of any tax
credits pursuant to this section.
(d) If the amount of any such tax credit claimed by a taxpayer
exceeds the taxpayer's income, privilege or premium tax liability, such
excess amount may be carried over for deduction from the taxpayer's
income, privilege or premium tax liability in the next succeeding year or
years until the total amount of the credit has been deducted from tax
liability.
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SB 386 3
(e) The secretary shall adopt rules and regulations regarding filing of
documents that support the amount of credit claimed pursuant to this
section.
Sec. 3. K.S.A. 2025 Supp. 72-4357 is hereby repealed.
Sec. 4. This act shall take effect and be in force from and after its
publication in the statute book.
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