Dan Posted January 15, 2020 Report Share Posted January 15, 2020 Question: If you earn interest from a bank account in Kansas but you are a resident of Oklahoma, what State taxes that interest? Kansas or Oklahoma? I read in the Kansas Individual Income tax booklet on page 19 "Income received by a nonresident from Kansas sources does not include income from annuities, interest, dividends...(such as bank accounts, stocks or bonds) unless earned by a business, trade profession or occupation carried on in Kansas..." Can someone explain the words in bold above? Thanks! Quote Link to comment Share on other sites More sharing options...
Dan Posted January 15, 2020 Author Report Share Posted January 15, 2020 I read one place that Bank interest is only taxable to your State of residence, not State where the bank is located. Is this correct? Quote Link to comment Share on other sites More sharing options...
Yardley CPA Posted January 15, 2020 Report Share Posted January 15, 2020 Did you receive a 1099-INT from the bank, mailed to either your home address or your clients home address, reporting the interest? While I'm not 100% certain, I am 99.9...you report that interest income on your resident return. Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted January 15, 2020 Report Share Posted January 15, 2020 10 hours ago, Dan said: Question: If you earn interest from a bank account in Kansas but you are a resident of Oklahoma, what State taxes that interest? Kansas or Oklahoma? I read in the Kansas Individual Income tax booklet on page 19 "Income received by a nonresident from Kansas sources does not include income from annuities, interest, dividends...(such as bank accounts, stocks or bonds) unless earned by a business, trade profession or occupation carried on in Kansas..." Can someone explain the words in bold above? Thanks! They are saying a nonresident of Kansas does not have to claim the interest on a Kansas tax return. That is also true in Oregon and other states I have dealt with. Quote Link to comment Share on other sites More sharing options...
Catherine Posted January 15, 2020 Report Share Posted January 15, 2020 3 minutes ago, DANRVAN said: They are saying a non resident of Kansas does not have to claim the interest on a Kansas tax return. Correct. The interest is taxed in the home-resident-domicile (pick your favorite term) state. Should that OK person have a business in KS - and the business earned the interest - then KS would tax the interest. Think of it this way: OK taxes all income, yes? Even if KS taxes KS-source income, they then have a standard deduction or exemption or tax threshold, before there is any actual tax. Even THEY don't want a gazillion additional tax returns, showing $135 in KS-source interest (let's say it's a big-dollar account), $4,000 exemption, taxable income $0, tax $0. Quote Link to comment Share on other sites More sharing options...
Dan Posted January 15, 2020 Author Report Share Posted January 15, 2020 Thanks for your replies. That is what I thought was the correct interpretation of the rules. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.