Kansas Estate Taxes

Kansas imposes an estate tax on the estates of persons who die on or after July 1, 1998. Through the end of 2006, the Kansas estate tax is equal to the federal estate tax credit for state death taxes computed on the basis of 1997 federal law.

Under 1997 federal law, the Kansas filing threshold for 2006 is $1 million and the Kansas tax is equal to 100 percent of the amount of the related federal credit for state death taxes. Generally, no Kansas tax is due unless the gross value of the estate exceeds $1 million.

Effective for decedents dying on or after January 1, 2007, Kansas has decoupled its estate tax from federal tax law entirely and enacted a new estate tax. The new tax creates a graduated tax scheme based on the value of an estate in excess of $1 million. Moreover, the graduated rates decrease until January 1, 2010, when all estates are exempt.

The graduated tax scheme for the new Kansas estate tax law is as follows:

• For the 2007 tax year, the tax ranges from a starting point of 3% on the value of estates in excess of $1 million through a maximum tax of $610,000 plus 10% of any estate value in excess of $10,000,000.
• For the 2008 tax year, the tax range decreases to 1% on the value of estates in excess of $1 million through a maximum tax of $320,000 plus 7% of any amount in excess of $10,000,000.
• For the 2009 tax year, the tax range further decreases to 0.5% of any estate with a value over $1 million through a maximum tax of $135,000 plus 3% of any excess over $10,000,000.

Returns. When the value of the federal gross estate is more than the amount protected by the unified credit, an estate's personal representative must make an inventory of the estate's assets within 30 days after appointment and file a Kansas estate tax return (Form K-706). The state return must be filed at the same time the federal return must be filed (usually within nine months of death unless an extension is granted). Copies of all federal returns must also be filed with the Kansas Department of Revenue. Any taxes owed must be paid by the due date for the return (generally within nine months of death).

All estates of decedents dying on or after May 22, 2003, must complete the April 1997 version of federal Form 706 and file it with Kansas Form K-706. The 1997 Form 706 is required by Kansas in addition to any current Form 706 that must be filed with the IRS.

Generation-skipping transfer tax. Effective July 1, 2003, the Kansas succession tax was repealed.