Earlier this month, I posted about questions I was receiving that Kansas had cut the gambling loss deduction. I had heard nothing about the change but reached out to other tax pros and Taxdood responded about changes in Ohio law. Today, Taxdood wrote about Kansas cutting the gambling loss deduction and linked to a Topeka Capital Journal article.
It seems that as part of their marathon legislative session this year, Kansas lawmakers dropped the gambling losses deduction beginning in January of 2014. The rational is that gambling is discretionary and by cutting the ability to deduct losses they expand the tax base without targeting lower income taxpayers.
All gambling winning are reported as income but gambling losses up to the amount of winnings can be deducted as an itemized deduction on the federal level. For tax year 2013, this reporting will be the same on the Kansas return KS-40. From 2014 on, all gambling winning will carry from the federal return but losses will have to be subtracted from itemized deductions on Kansas.
The legislators managed to get this by the gambling lobbyists and according to the Topeka Capital Journal article there doesn’t seem to be a big rush to fight it now.