Promoting Employment Across Kansas Credit
INCOME TAXPAYER-Effective for all taxable years commencing after Dec. 31, 2010.
A resident individual taxpayer that owns a qualified company under the PEAK program and materially participates in the business activities conducted at the relocated business facility, office, department or other operation of the qualified company shall be allowed a tax credit.
A taxpayer must meet the following qualifications to be eligible for the credit:
- The owner of a qualified company must have a signed incentive agreement with the Kansas Department of Commerce under the Promoting Employment Across Kansas (PEAK) act.
- The owner of the qualified company must "materially participate" in a trade or business activity of the qualified company. A taxpayer materially participates in a trade or business activity if he or she works on a regular, continuous, and substantial basis.
- The business must have relocated a business facility, office, department, or operation to Kansas from another state;
The credit is 95 percent of the taxpayer's resident individual's income tax liability for Kansas source income from a qualified company, attributable to the relocated business facility.
Limitation of Credit
The credit is limited to the amount of the taxpayer's Kansas tax liability.
Procedures to Claim the Credit
This credit is available only through electronic filing.
Owners Promoting Employment Across Kansas (PEAK) Credit Definitions
A taxpayer materially participates if and only if he or she meets one of the following seven tests provided in Internal Revenue Service Regulation 1.469-5T(a).
- The taxpayer works 500 hours or more during the year in the business activity.
- The taxpayer does substantially all the work in the trade or business activity.
- The taxpayer works more than 100 hours in the trade or business activity during the year and no one else works more than the taxpayer.
- The activity is a significant participation activity (SPA), and the sum of SPAs in which the taxpayer works 100-500 hours exceeds 500 hours for the year.
- The taxpayer materially participated in the trade or business activity in any five of the prior 10 years.
- The activity is a personal service activity and the taxpayer materially participated in that activity in any three prior years.
- Based on all the facts and circumstances, the taxpayer participates in the activity on a regular, continuous, and substantial basis during the year. However, this test only applies if the taxpayer works at least 100 hours in the activity, no one else works more than the taxpayer in the activity, and no one else receives compensation for managing the activity.