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HB 2084

Allowing an itemized deduction for certain wagering losses for individual income tax purposes.

2025-2026 Regular Session

HB 2084 allows Kansas itemized deduction for federally deductible wagering losses (IRC 165(d)) starting in 2025, reducing state taxes for those who itemize.

Died in Committee
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Bill Summary · HB 2084

HB 2084 — Allowing an itemized deduction for certain wagering losses (Kansas)

Purpose / Intent

HB 2084 amends Kansas income tax law to allow individual taxpayers to claim an itemized deduction on their Kansas return for wagering (gambling) losses that are allowable on their federal income tax return under Internal Revenue Code (IRC) section 165(d). The change is intended to align Kansas tax treatment of gambling losses with the federal rule (subject to federal limits) and to remove some outdated statutory references.

Key provisions

  • Adds wagering losses (losses from wagering transactions allowable under IRC §165(d)) to the list of items that may be included in the Kansas itemized deduction beginning in tax year 2025.
  • Continues existing Kansas rules allowing taxpayers to elect a Kansas itemized deduction in lieu of the Kansas standard deduction (Kansas has allowed the election regardless of whether the taxpayer itemized federally since 2021).
  • Limits the Kansas deduction to losses that are allowable under federal law (i.e., generally deductible only to the extent of documented gambling winnings, per IRC §165(d)).
  • Repeals and replaces the existing statutory section (K.S.A. 2024 Supp. 79-32,120) as drafted and removes outdated statutory references.

Who is affected

  • Individual Kansas taxpayers who claim the Kansas itemized deduction (instead of the Kansas standard deduction) and who have federally allowable gambling losses.
  • The Department of Revenue (administration and tax return processing).

Fiscal impact

  • Department of Revenue estimate: Kansas taxpayers would claim about $451.4 million in wagering losses for tax year 2025.
  • Estimated reduction in State General Fund revenues: approximately $15.8 million in tax year 2025 (FY2026) and annually thereafter (based on an effective tax rate of 3.5%).
  • Implementation cost: one-time State General Fund cost of $73,545 in FY2026 to modify automated tax systems; programming to be done by existing staff but may require contracting if workload is large or timing is constrained.
  • The fiscal note states the revenue effect was not included in the FY 2026 Governor’s Budget Report.

Procedural / timeline notes

  • Introduced: January 24, 2025.
  • Effective: language indicates applicability beginning tax year 2025 (so first fiscal impact FY2026); bill text also contains standard language that it takes effect upon publication in statute book.
  • Hearing scheduled: Thursday, February 6, 2025, 3:30 PM, Room 346‑S.
  • Companion bill: SB 2854.
  • Primary sponsors listed (Kansas/house context): Quinlan, Holt, Amato, Ichiyama, Todd, Matsumoto, La Chica, Belatti, Marten, Perruso, Cochran, and Tony M. McCombie.

Practical effect

If enacted, taxpayers who currently report federally deductible gambling losses (properly documented and limited to the amount of gambling winnings) would be able to reduce their Kansas taxable income by those losses when they choose the Kansas itemized deduction — lowering Kansas income tax liabilities and producing the estimated annual State General Fund revenue loss.

Compiled from official sources — confirm details with the bill’s official record.

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