Efforts by the Kansas Departments of Labor, Revenue, and Administration to either tax or claw back unemployment benefits received by a handful of Kansans who claim they were victims of fraud violates state law, according to a state senator whose committee sponsored the legislation.
Senate Bill 50 became law in May of 2021 after each body of the legislature overrode Governor Kelly’s veto. Kelly had charged the bill was “reckless and shortsighted” in criticizing the legislation. It’s a wide-ranging bill. Unemployment fraud protection was a last-minute add-on to legislation that provided several measures of income tax relief. Included among its more than 20 pages is Section 5,
Notwithstanding any other provision of law, for any individual whose identity was fraudulently used to secure unemployment compensation, if such individual never received such compensation, such compensation shall not be considered gross income and shall not be taxable for Kansas income tax purposes after determination by the department of labor that the benefits were obtained fraudulently by another individual.
Sen. Caryn Tyson (R-Parker) chairs the Senate Assessment and Taxation Committee:
“In 2021, a super majority of legislators passed SB 50 into law, in spite of Governor Laura Kelly‘s efforts to block it. It clarified victims of identity theft do not owe Kansas income tax on unemployment compensation that was obtained by another. It is something I will not forget because I worked diligently to get it passed and could not understand how anyone, especially a governor, would not support it.”
Greg Hughes is the Topeka accountant whose clients, including an 84-year-old woman still working to support her disabled daughter and grandson, have been caught in this bureaucratic maze for more than two years:
“It’s so difficult to contact anyone and get any resolution”
But Hughes said in an interview that after additional documents were submitted, a spokesperson for the Department of Labor indicated his clients’ cases are near a resolution.
We reached out to the agencies involved for comment, but none responded.