Revenue Ruling

Ruling Number:12-1998-2
Tax Type:Individual Income Tax
Brief Description:Application of Kansas income tax to Kansas Public Employees Retirement System(KPERS), lump sum payments.
Effective Date:03/04/1998

Office of Policy & Research


March 4, 1998

Issue: Application of Kansas income tax to Kansas Public Employees Retirement System (KPERS),
lump sum payments.

Relevant statutes: K.S.A 74-4923(b), K.S.A. 74-4901, K.S.A. 79-32,117(ii).

The purpose of this revenue ruling is to clarify the taxation of contributions and earnings credited to a KPERS member’s account upon the member’s termination from the state or other qualified employer. When a member terminates employment and elects a lump sum payment of KPERS contributions, a portion of that payment is accrued earnings.

K.S.A. 74-4923(b) states in pertinent part: "Any annuity, benefits, funds, property or rights created by, or accruing to any person under the provisions of K.S.A. 74-4901 et. seq., and amendments thereto, shall be exempt from any tax of the state of Kansas or any political subdivision or taxing body of the state." Earnings are credited pursuant to K.S.A. 74-4919(l).

It shall be the policy of the Kansas Department of Revenue to exempt from Kansas income tax all distributions
from KPERS.

John D. LaFaver
Secretary of Revenue

Date Composed: 03/06/1998 Date Modified: 10/11/2001