The Earned Income Credit (EIC) percentage of your taxation reimbursement has special therapy in Kansas. Kansas law considers the EIC percentage of your refund exempt (KEEP) in bankruptcy, but only when it meets the next two needs:

1. The refund should never have now been gotten in the time your bankruptcy is filed.
2. You may be just permitted to claim one of EIC refund as exempt year.

Which means you have to claim as exempt the EIC part of one taxation reimbursement that you haven’t yet gotten. For most of us this will suggest they might claim the EIC percentage of the second taxation reimbursement they get as exempt. For instance, in the event that you filed your bankruptcy on 9/1/2020, your 2020 taxation reimbursement could be gotten sometime into the 12 months 2021, and also you will be able to claim the EIC part of that 2020 taxation reimbursement as exempt. The percentage of the refund that’s not EIC could be considered non-exempt, and it is at the mercy of return, as suggested when you look at the reimbursement For Future taxation statements section above).

Just how to Invest a Tax Reimbursement Before Bankruptcy

Before you file bankruptcy, I need to stress what you can’t do with a income tax reimbursement before we address the countless methods for you to spend a taxation reimbursement:

• NEVER provide any portion of one’s taxation reimbursement to virtually any family member or friend for almost any reason.
• NEVER buy something for a buddy or member of the family.
• NEVER pay a financial obligation, bill, or other types of cost for the buddy or member of the family.
• NEVER spend any creditor that is unsecured these could consist of but they are not restricted to healthcare Bills, charge cards, pay day loans, unsecured loans, Signature Loans, Past Due bills, Past Due lease, Civil Judgments, etc.) significantly more than $600 TOTAL per creditor, within the ninety days before you file bankruptcy

Check out ways that are appropriatethese are merely a number of the examples, plus in no chance consist of all feasible choices) of investing a taxation reimbursement prior to filing bankruptcy, and you can find generally speaking no limitations on just how much you are able to invest:

• Automobile: Catch up on back automobile re re payments, spend your car or truck loan down, buy your self a car that is new pay money for repairs to your vehicle, pay money for insurance coverage on your own automobile
• House: Catch up on back house payments, pay your house loan off, purchase house repairs and/or renovating, buy insurance coverage on your own house
• Domestic products: you can purchase necessary products for your house, such as for instance devices, furniture, beds, etc.
• Clothes: You can aquire garments, coats, shoes, etc. for your needs, your better half, and all sorts of of one’s dependents
• Meals: you can purchase as much as one year’s worth of food for your needs (as an example fill up on food, or purchase part of beef)
• Getaway: Truth be told, you are able to make the grouped household on a break

Overview

Here you will find the top ten things you should know about bankruptcy and tax statements in a very simplified list:

1. Any previous taxation statements that are due during the time you file your bankruptcy, but haven’t been filed yet, are managed by bankruptcy legislation.
2. In the event that you file bankruptcy within the very early months regarding the year it is more unlikely you will need to start all of your taxation refunds than in the event that you file when you look at the subsequent months of the season.
3. Any income income tax refunds you obtain for wages you obtained the season when you filed bankruptcy, and all sorts of subsequent years, are maybe not susceptible to bankruptcy legislation and people future refunds are safe.
4. File your tax statements, get the reimbursement, invest it, then file bankruptcy if you should be concerned with maintaining any non-EIC part of your refund.
5. Before you get that next refund (you will probably lose the non-EIC portion of that refund) if you want to keep the EIC portion of your next refund, file bankruptcy.
6. Usually do not give your pals or family unit members all of your income tax refunds for almost any explanation.
7. Don’t spend any unsecured creditors together with your taxation reimbursement, however, if you need to pay awareness of the $600 90 day restriction guideline noted above (should you choose pay a lot more than $600 in 90 you may need to wait to register bankruptcy until 91 days from when you made the very last repayment to that particular creditor).
8. Keep receipts for what you invest your taxation reimbursement on.
9. In the event that you get any taxation refund when you file bankruptcy usually do not invest some of it until such time you have verification from us so it permissible.
10. Check this out article completely so you could have kept that you don’t end up losing the money.