Kansas is more than just a major hub for manufacturing companies—it’s also a pretty business-friendly state. Whether you’re a small brick-and-mortar operation or a growing enterprise, you can find a range of business tax credits and incentives to apply for.
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Kansas business tax incentives
Promoting Employment Across Kansas (PEAK)
Promoting Employment Across Kansas (PEAK) is a job creation incentive designed to stimulate the state economy. Under the program, new and existing companies located in or moving to Kansas can get a refund on 95% of the payroll withholding tax of the new employees they hire.
Job creation projects that create at least 10 new jobs in metropolitan areas in Kansas (or five new jobs in non-metropolitan areas) within two years are eligible for the incentive for up to seven years. Projects that create 100 new jobs within two years can claim payroll withholding savings for up to 10 years.
To qualify, businesses need to meet the below criteria:
- Be a for-profit entity with a qualifying NAICS code, or a not-for-profit entity headquartered in Kansas
- Create new jobs in Kansas resulting from locating, relocating, or expanding a business
- Meet minimum employment requirements (at least ten new metro jobs or five new non-metro jobs)
- Pay wages that meet or exceed the county’s median wage
- Provide adequate healthcare coverage for full-time employees and pay at least 50% of the health insurance premium
- Be approved for benefits by the Kansas Secretary of Commerce
Download the PEAK application form here.
Kansas Industrial Training (KIT)
The Kansas Industrial Training (KIT) program is designed to support Kansas companies in creating net new jobs. Any business that creates a new job that pays equal to or more than the median wage for their county can get reimbursed for the cost of training that new hire.
Eligible expenses include instructor salaries; curriculum planning and development; materials, supplies, and textbooks; training aids; minor training equipment; and travel. Businesses can get between $1,200 and $2,000 per trained employee.
Get more details and apply for KIT here.
Kansas Industrial Retraining (KIR)
The Kansas Industrial Retraining (KIR) program reimburses companies that are in the midst of restructuring for retraining employees who’d otherwise be displaced. To qualify, a company needs to:
- Demonstrate that they’re restructuring their business operations;
- Retrain at least one employee at a wage equal to or above the county median wage; and
- Prove that the employee would have been displaced or made obsolete without new skills training.
Qualifying companies can get between $1,200 and $2,000 per retrained employee, provided they match that reimbursement dollar for dollar. Learn more about the KIR program here.
Kansas Training and Retention Aligned with Industry Need (KTRAIN)
The Kansas Training and Retention Aligned with Industry Need (KTRAIN) is a job retention program designed to help close the skills gap many business owners see in their workforces. With KTRAIN, eligible businesses can customize their own job training program and get reimbursed for 50% of the cost.
To qualify, companies need to engage in one of the following industries: manufacturing, healthcare, education, technology, or transportation. Learn more about how to apply for the program here.
Check out these six online courses to help your team level up.
High Performance Incentive Program (HPIP)
The High Performance Incentive Program (HPIP) rewards manufacturing and manufacturing-adjacent companies for paying above-average wages and implementing professional development programs in their workplace.
Qualifying companies can get a 10% income tax credit—up to $1 million if you’re located in a metro county—on an eligible capital investment, a training tax credit up to $50,000, and a sales tax exemption on the company’s capital investment in a qualified facility.
To be eligible for the program, a company must:
- Be a for-profit company subject to state taxes;
- Pay wages exceeding the average wage standard (as compared to other similar firms in the same geographical area with matching NAICS codes); and
- Be either a manufacturer or able to document that most of its sales are to Kansas manufacturers and/or out-of-state businesses or government agencies.
Apply to the HPIP here.
Alternative Fuel Tax Credit
The Alternative Fuel Tax Credit supports C corporations in Kansas that pay expenses for either a qualified alternative fuel vehicle or an alternative fuel fueling station. For qualified alternative fuel vehicles placed in service in 2005 and later, the tax credit is equal to 40% of the incremental cost or conversion cost for each vehicle, up to:
- $2,400 for vehicles with a gross weight of less than 10,000 pounds;
- $4,000 for heavy-duty motor vehicles with a gross weight of between 10,000 and 26,000 pounds; and
- $40,000 for vehicles with a gross weight of more than 26,000 pounds.
The credit for alternative fuel fueling stations placed in service in 2009 and beyond is equal to 40% of the total amount expended for each station, up to $100,000.
Get more information on the credit here.
Abandoned Well Plugging Credit
Certain Kansas companies can get a tax credit against their income tax liability for plugging an abandoned oil or gas well located on their property. The credit amount is 50% of the cost of the expenses to plug the well.
Learn more about the credit here.
Agritourism Liability Insurance Credit
Agritourism businesses in Kansas can get a tax credit to help offset the cost of liability insurance. The credit amount is 20% of the cost of liability insurance paid during the tax year. To qualify for the credit, agritourism businesses have to register with the Kansas Tourism Division at the Kansas Department of Commerce.
Find out how to claim the credit here.
Apprenticeship Tax Credit
Under the Kansas Apprenticeship Tax Credit program, eligible Kansas corporations can get tax credits for hiring qualified apprentices in their workplaces. For tax years 2023 through 2025, employers can get a credit of $2,500 per qualified apprentice, not to exceed 20 credits in any given year. For tax years 2026 and later, the credit increases to $2,750 per apprentice.
Businesses can get an additional $500 credit if they meet these requirements:
- The apprentice is enrolled in a secondary or postsecondary career and technical education program;
- Is under 18 at the time credit was claimed;
- Has been employed for at least 90 days; and
- Participates in an apprentice program registered with Commerce.
Learn more about the credit here.
Related: How to hire interns legally.
Assistive Technology Contribution Credit
Kansas’s Assistive Technology Contribution Credit rewards employers for contributing to an individual development account reserve fund. These funds are used to purchase assistive technology for people with disabilities.
The credit amount is equal to 25% of the contribution amount, up to $6,250. Learn how to claim the credit here.
Aviation and Aerospace Tax Credit
With this credit, qualified aviation and aerospace employers can get tax credits for hiring qualified employees and supporting their continuing education. Eligible aviation employers can get:
- A credit equal to 10% of the compensation they paid their qualified employees in each of the first five years of employment, up to $15,000 per year
- A credit for 50% of the tuition reimbursed to a qualified employee during the tax year
Download the credit application form here.
Center for Entrepreneurship Credit
Businesses that contribute cash or property to the Kansas Center for Entrepreneurship (KCE) can get a tax credit. The credit amount is 75% of the total contribution amount, up to $100,000 per year. Claim the credit here.
Child Day Care Assistance Credit
Kansas has a Child Day Care Assistance Credit that rewards C corporations for helping their employees with daycare logistics and costs. To qualify for the credit, a business must do one of the following:
- Pay for child day care services for its employees;
- Locate child day care services for its employees;
- Provide facilities and necessary equipment for child day care services to its employees;
- Provide access to available child day care services for its employees; or
- Provide payments to an organization providing access to child daycare services.
Keep in mind that the childcare facility providing the services of caring for the employees’ children must be licensed by the Kansas Department of Health and Environment.
The credit amount is between 30-50% of the associated daycare costs, depending on what services you provide your employees; the total credit can’t exceed $45,000 in any given taxable year. Get more information on the credit here.
Discover seven practical ways to support working parents in your workplace.
Commercial Restoration and Preservation Credit
The Commercial Restoration and Preservation Credit gives businesses a tax credit for restoring a commercial structure that’s at least 50 years old. The credit only applies to projects with expenses of at least $25,000 but not more than $500,000.
The credit amount is equal to 10% of the costs of restoration and preservation. Apply for the credit here.
Community College or Technical College Contribution Credit
Through 2026, businesses can get a tax credit for contributing to a community college or technical college in Kansas that needs help with capital improvements, deferred maintenance, or buying new technology or equipment.
The credit amount is 60% of the total contribution amount. Claim the credit here.
Community Service Contribution Credit
Businesses can get a tax credit for contributing to a community service organization or governmental entity that engages in any activities involving community service, crime prevention, healthcare, or youth apprenticeship and technical training.
Download a list of approved community service organizations here, or claim the credit here.
Disabled Access Credit
Kansas gives businesses a tax credit for making their buildings or properties accessible to people with disabilities. The credit amount is equal to 50% of the expenditures needed to make the property accessible, up to $10,000.
Claim the credit here.
Plus, learn exactly what you need to do to provide reasonable accommodations as an employer.
Eisenhower Foundation Credit
Through 2025, businesses can get a tax credit for contributing to the Eisenhower Foundation. The credit amount is 50% of the total contribution amount. Claim the credit here.
Employer Health Insurance Contribution Credit
The Employer Health Insurance Contribution Credit rewards corporations for establishing a small employer health benefit plan or contributing to a health savings account. The credit amount is:
- $70 per month per eligible covered employee for the first 12 months of participation
- $50 per month per eligible covered employee for the next 12 months of participation; and
- $35 per month per eligible covered employee for the next 12 months of participation.
Find out how to claim the credit here.
Here’s everything you need to know about offering health insurance to employees.
Environmental Compliance Credit
The Environmental Compliance Credit gives Kansas corporations a credit for upgrading an industrial process plant to comply with environmental standards. The credit amount is equal to the total expenditures to improve the existing refinery. Learn more about the credit here.
Friends of Cedar Crest Association Credit
Through 2025, businesses can get a tax credit for contributing to the Friends of Cedar Crest Association, a nonprofit that works to preserve and restore Cedar Crest. The credit amount is 50% of the total contribution amount. Claim the credit here.
Historic Preservation Credit
Kansas’s Historic Preservation Credit incentivizes businesses to rehabilitate certified historic properties in Kansas. Eligible businesses can get a credit equal to 30% of a project’s qualified rehabilitation expenditures as long as the total expenditures equal at least $5,000.
Learn more about the program here.
Low-Income Students Scholarship Credit
Kansas employers can get a tax credit for donating to a certified scholarship-granting organization, which helps cover school tuition for low-income students.
The credit amount is 75% of the contribution amount. Learn how to claim the credit here.
Pregnancy Resource Act Tax Credit
Kansas corporations can get a tax credit for donating to eligible pregnancy centers and residential maternity care facilities. The credit amount is 70% of the contribution amount. Learn how to claim the credit here.
Research and Development Credit
Kansas offers its own state Research and Development (R&D) Credit for businesses engaging in qualified R&D activities. Those activities must be technological in nature; used to improve the functionality, performance, reliability, or quality of a new or existing business component; used to gather information that will help eliminate uncertainty around the development of a product; and involve a process of experimentation, such as testing or modeling.
The credit amount is equal to 10% of the difference between the actual qualified R&D expenses for the year and the average of the actual expenditures made during the year and the two previous tax years.
Find out how to apply for the credit here.
Related: Here’s everything you need to know about the federal R&D credit.
Short Line Railroad Tax Credit
Available through 2031, Kansas’s Short Line Railroad Tax Credit gives eligible rail carrier companies a tax credit for investing in qualified railroad track maintenance. The credit is limited to $5,000 per mile of track or rail siding owned or leased within the state of Kansas.
Get more information on the credit here.
Swine Facility Improvement Credit
With the Swine Facility Improvement Credit, eligible Kansas companies can get a tax credit for improving a qualified swine facility. That means any swine facility that uses swine waste management and is owned by one of the following:
- Sole proprietorship or partnership
- Family farm corporation
- Authorized farm corporation
- Limited liability agricultural company
- Family farm limited liability agricultural company
- Limited agricultural partnership
- Family trust
- Authorized trust
- Testamentary trust
The credit amount is 50% of the costs incurred to make the swine facility improvements.
Get more information on the credit here.
Targeted Employment Credit
With the Targeted Employment Credit, eligible “targeted employers” can get an income tax credit for hiring high school students with developmental disabilities to work in an integrated environment.
The credit is equal to 50% of the wages paid to the employee on an hourly basis, not to exceed $7.50 per hour.
Find out how to claim the credit here.
Kansas Downtown Redevelopment Tax Rebate
With the Kansas Downtown Redevelopment Tax Rebate, business owners can get a rebate on the property tax they’ve paid on their property—as long as the property has undergone certain approved improvements.
For the first five years, the rebate amount is equal to the incremental tax increase between the property’s valuation before the improvements and after. For the sixth year, 80% of the tax is subject to rebate.
Find out how to apply for the rebate here.
Business tax exemptions in Kansas
Kansas also has a variety of tax exemptions for businesses, especially those involved in manufacturing and agriculture. You can get tax exemptions for purchasing warehouse machinery, for example, using renewable energy sources in production, purchasing farm equipment, and more.
See a full list of Kansas business tax exemptions here.
Kansas city and county tax credits
Some cities and counties in Kansas have their own business tax incentive programs. To find out if yours does, check here for your city’s website.
Business financing in Kansas
Want more support starting or growing a business in Kansas? State resources can help. Read through Gusto’s guide to grants and loans in Kansas.
While you’re at it, bookmark these helpful posts on running a business in Kansas:
