K-120EX: Expensing Deduction (2025)
Kansas · Kansas DOR · Used for tax years 2025
Kansas Schedule K-120EX is used to elect and calculate an expensing deduction for eligible property placed in service in Kansas. It also reports recapture of previously claimed deductions, the deduction used this year, and any excess treated as a Kansas net operating loss.
Who files this form
Use Schedule K-120EX to elect the Kansas expensing deduction for eligible property placed in service in Kansas during the taxable year, or to report recapture of a deduction previously claimed.
The election is available to income tax and privilege tax filers. File the schedule with the applicable return: K-120, K-120S, K-130, K-40 or K-41.
Each entity in a combined group that made a qualifying investment must complete its own K-120EX and enclose it with the return. Pass-through entities should supply their shareholders or partners with the entity’s K-120EX.
What you'll need
- Taxpayer information: Name and SSN or EIN. Partners, shareholders and members also need the pass-through entity’s name, EIN and their ownership percentage.
- Federal Form 4562: The instructions require this to support the claim. For a paper return, enclose it with each K-120EX, along with any schedules needed to reconcile its amounts to the Kansas expensing claimed.
- Property details: Recovery period, depreciation method, basis for depreciation, bonus depreciation and any Section 179 expense deduction.
- Recapture details, if applicable: The original recovery period, year the deduction was claimed and Kansas expensing previously allowed.
- Combined-group details, if applicable: Names, EINs and amounts used by other entities. Enclose a separate schedule if more space is needed.
How to file
Make the election by filing Schedule K-120EX with your Corporation Income Tax return (K-120), Partnership or S Corporation Income Tax return (K-120S), Privilege Tax return (K-130), Individual Income Tax return (K-40) or Fiduciary Income Tax return (K-41).
For a paper return, enclose federal Form 4562 with each K-120EX and any additional schedules needed to reconcile the federal amounts to your Kansas claim. Do not staple.
Complete Part B for the deduction and Part C for any recapture, then carry the totals to Part A. Follow the instructions for your return type when transferring the result to your tax return.
The supplied text does not give a mailing address or e-filing directions.
Common mistakes
- Stapling the schedule: The form says “DO NOT STAPLE.”
- Using a different recovery period: Part B’s recovery period should match federal Form 4562. Part C should use the recovery period from the original expensing deduction.
- Missing the stopping point: K-40 and K-41 filers stop after Part A, line 5, and transfer the amount as instructed. A positive amount is a subtraction modification; a negative amount is an addition modification.
- Claiming incompatible benefits for the same investment: An investment used for this deduction cannot also be used for the credits, accelerated depreciation or deductions listed in the instructions under K-35, K-38, K-53, K-59, K-62, K-73, K-77, K-78, K-80, K-81, K-82 or K-83.
- Sharing an excess deduction’s net operating loss: That loss may be used only by the entity that claimed the original deduction, not by another entity in a combined group.
Questions people ask
What property qualifies?
Eligible property includes tangible property depreciable under IRC Section 168 and certain computer software described in the instructions. Exclusions include residential rental property, nonresidential real property, railroad grading or tunnel bores, and other property with a recovery period exceeding 25 years. The property must be placed in service in Kansas during the taxable year.
How is the deduction calculated?
Subtract bonus depreciation and the Section 179 expense deduction from the property’s federal depreciable cost. Multiply the remaining basis by the factor in the instructions for the property’s recovery period and depreciation method.
What happens if the deduction exceeds Kansas net income?
The excess is treated as a Kansas net operating loss of the entity that made the original investment. Part A, line 10, calculates the amount remaining to carry forward to the next year’s return.
When must a previous deduction be recaptured?
Recapture applies if the property is sold, disposed of or moved out of Kansas within its recovery period. The recapture amount is treated as Kansas taxable income allocated to Kansas. If the recovery period has expired, there is no recapture.