In early January, when the McFadden Group LLC sent out notices for the 2018 tax season, the tax preparer asked its clients for all of their itemized deduction information — even though it wasn’t clear whether they would be able to use it.

That will depend on how things turn out with a bill making its way through the Kansas Legislature. Senate Bill 22, a tax reform proposal, could save some people hundreds of dollars if it passes by allowing them to itemize on their state returns even if they don’t itemize on their federal returns, something that current state tax laws don’t allow.

Changes in federal tax laws that President Donald Trump championed in 2017 raised the federal standard deduction for a married couple to $24,000, up from $12,000. However, the Kansas standard deduction for a married couple remains at $7,500. That means people whose deductible income is above the state’s standard deduction but below the new, higher federal standard deduction are out in the cold, at least when it comes to getting a break on their state taxes.

Under the current law, McFadden Group LLC owner Brenda McFadden said, a couple in the 5.25 percent tax bracket with $20,000 in itemized deductions would lose out when they’re filing with the state. With $20,000 in deductions, McFadden estimates that’s $656 in extra Kansas tax they would be paying because they couldn’t itemize their deductions on their Kansas return.

“That’s a car payment or a month’s groceries,” McFadden said.

However, under the new bill, McFadden said the couple would be able to itemize their $20,000 in deductions on their state returns while taking the standard deduction for their federal taxes.

Because of the uncertainty of whether the bill will pass, McFadden is asking clients to continue to provide receipts from medical expenses, real estate taxes, mortgage interest, and charitable contributions, just in case the bill becomes law. If the bill does pass, it will retroactively allow Kansas taxpayers to claim deductions on just their state returns for 2018.

The bill’s future is far from clear. It has passed through the Senate and should be up for discussion in the House next week, Steven Johnson, R- Assaria, chairman of the House Taxation Committee, told the Journal-World during a phone interview.

However, it has also sparked partisan debate. Republican leaders in the Legislature argue that the bill is necessary to prevent people from paying more in state taxes as a result of the federal tax changes. Opponents of the bill, however, say changing the tax laws could put the state in a precarious financial position.

And some Republicans, like Johnson, acknowledge that there are big hurdles to making the bill work.

“On the surface, I like allowing people to itemize,” Johnson said. However, he says it’s a complicated issue having it coupled with the federal income tax. For example, the audit function resides at the federal government level — the state doesn’t have the resources to do the amount of auditing that the extra itemized returns would require. He’s also concerned with making it retroactive. He feels it’s best to get everything in order and wait until next year, when everyone knows what the rules are.

On the other side of the aisle, Rep. Boog Highberger, D-Lawrence, is also worried about the enormous amount of extra resources needed to process and audit returns with itemized deductions.

“I would be more likely to support an increase in the state standard deduction,” Highberger said in an email to the Journal-World.

McFadden, the tax preparer, is also frustrated because the individual tax provision is just one part of a larger bill. The same measure also has a proposal that would permit deductions of global intangible low-taxed income — something that would primarily benefit multinational corporations, not individuals.

“What is in this bill is stuff that affects corporations and businesses, and my point is to just fix this individual tax problem that affects the middle-class people,” she said. “The wealthier people give a lot to charity and have a bigger house with a bigger mortgage, so they are going to be over the $24,000 anyway and they will itemize on their Kansas taxes.

“I’m just looking for fairness,” McFadden said. “To me, it’s not fair (that) if you don’t itemize on your federal, you can’t on your state.”