H.B. 2106 would give employers the flexibility to continue withholding income taxes based on an employee's primary work location rather than where the employee is temporarily working remotely during the coronavirus pandemic from Jan. 1, 2021, through Dec. 31. The Senate passed the bill by a 24-15 vote Wednesday, sending the measure back to the state House of Representatives to concur with amendments the Senate made to the legislation.
The bill would extend Democratic Gov. Laura Kelly's executive order that provided similar withholding relief for employers from March 13, 2020, through Dec. 31, 2020. Like the executive order, the bill doesn't seek to alter the sourcing of income or an employee's ultimate tax liability, but would rather allow employers to maintain the status quo of income tax withholding during the pandemic for administrative ease.
As originally passed by the House, the bill would have only changed Kansas' date for its corporate income tax returns to one month after the federal tax return due date, starting in tax year 2020. The Senate retained that provision and added the withholding flexibility, an individual income tax exemption for compensation that was fraudulently received by someone else through identity theft and a tax exemption for Social Security benefits, starting in tax year 2021.
--Additional reporting by Jaqueline McCool. Editing by Neil Cohen.
For a reprint of this article, please contact reprints@law360.com.