Kan. Stat. Ann. § 79-32,307
Recaptured or disallowed credits; effect on tax liability.
Operative Text
If, under section 42 of the federal internal revenue code, a portion of any federal tax credit taken on a qualified development is required to be recaptured or is otherwise disallowed during the credit period, the qualified taxpayer that claimed the credit pursuant to this act with respect to such qualified development shall also be required to recapture a portion of any credits authorized by this act. The percentage of credits subject to recapture shall be equal to the percentage of federal tax credits subject to recapture or otherwise disallowed during such period. Any credits recaptured or disallowed shall increase the tax liability of the qualified taxpayer who claimed the credits and shall be included on the tax return of the qualified taxpayer submitted for the taxable year in which the recapture or disallowance event is identified.
Kan. Stat. Ann. §§ 79-32,304 and 79-32,307 establish a mirroring rule between federal and Kansas low-income housing tax credits. When a portion of a federal Section 42 tax credit is recaptured or disallowed during the credit period, the corresponding Kansas credit is also subject to recapture at the same percentage. The recaptured or disallowed Kansas credit amount is then added back to the taxpayer's Kansas tax liability and must be reported on the return filed for the year in which the recapture or disallowance event is identified.
Plain English — not legal advice.
Operators of qualified low-income housing developments who claim Kansas housing tax credits under §§ 79-32,304 and 79-32,307 should be aware that any federal Section 42 recapture event automatically triggers a proportional Kansas credit recapture. Compliant operators generally maintain thorough records of their federal credit compliance status throughout the credit period so that any recapture percentage can be accurately calculated and reported. When a recapture or disallowance event occurs, the additional Kansas tax liability is typically reflected on the tax return for the taxable year in which that event is identified.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
While Kan. Stat. Ann. §§ 79-32,304 and 79-32,307 primarily govern the tax obligations of developers and investors in qualified housing developments, tenants living in those developments may have an indirect interest in understanding how credit recapture works. A recapture event can signal a compliance issue with the underlying qualified development, which may affect the property's continued status as affordable housing. Tenants who have concerns about their building's compliance with affordable housing requirements may wish to consult a tenant-rights organization or contact the Kansas Housing Resources Corporation for general information.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 18, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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