Individual Income Tax
Application of Kansas income tax to Kansas Public Employees Retirement System(KPERS), lump sum payments.
Office of Policy & Research
REVENUE RULING 12-1998-2
March 4, 1998
Application of Kansas income tax to Kansas Public Employees Retirement System (KPERS),
lump sum payments.
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
John D. LaFaver
Secretary of Revenue
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