Rural Opportunity Zones are selected Kansas counties that offer state income tax waivers or forgive student loan debt up to $15,000 over five years in exchange for residency through 2016.
The pilot program, runs through the Department of Commerce, is meant to draw recent college graduates to rural areas that are suffering from population decline. New residents are encouraged to start or buy new businesses to spur the economy in these 73 selected counties.
Student Loan Repayment
The Student Loan Repayment program is a big draw for participants. Applicants must have graduated with an associate’s or bachelor’s degree from an accredited post-secondary institution in order to qualify, including K-State.
“Students only need to move to a particular county, have a degree from an accredited university and a loan balance,” said Chris Harris, ROZ program manager. “It’s much easier to encourage someone living in urban Kansas than to convince someone from Chicago (to move to rural Kansas).”
Counties and the state split the amount of loan money given to residents, meaning the amounts received by individuals depend on state and county budgets. According to the Department of Commerce, not all residents receive $15,000. The payments cap out each year at 20 percent of the total loan balance, with a maximum of $3,000 disbursed to an individual each year.
Some ROZ counties don’t offer repayments at all; interested participants can familiarize themselves with each county on the Kansas Department of Commerce website to learn more about what they offer. Some counties may offer more repayments, but the repayments will not be matched by the state.
Some counties have waiting lists, including Chautauqua, Cheyenne, Cloud, Graham, Harper, Hodgeman, Jewell, Kingman, Kiowa, Lincoln, Marion, Mitchell, Pawnee, Pratt, Rawlins, Rooks, Rush, Russell, Sherman, Smith, Thomas, Trego, Wilson and Woodson. Time spent on the wait-listed varies, but the typical wait is between two to six months. A prospective resident can skip the wait list if they have a employer that will sponsor them. As of now, the legislature has not discussed the extension of the program past 2016.
“There hasn’t been serious or extensive talks at this point because it is so far out in legislative terms,” Harris said. “When it reaches that point, it will gain more attention. But, the legislature has been pleased with progress so far.”
For some students, though, the incentives aren’t enough.
“For me, I wasn’t planning on staying in Kansas,” Rashaell Keating, freshman in architecture, said. “There aren’t a lot of jobs here for my major. A lot of firms tend to be on coasts, and there aren’t very many big firms in the middle of the Konza.”
Tax Break
Some counties offer state income tax breaks either instead of, or in addition to, the student loan incentives.
According to the ROZ application rules, current Kansas residents do not qualify for this incentive – unless they have a legal address outside of Kansas for five years before applying.
Out-of-state students are encouraged to apply after graduation. However, military servicemen and servicewomen stationed outside of the state may not qualify. Since they are listed as domiciled in Kansas, no matter where in the world they are currently stationed, they are considered current residents and ineligible. Residents of other states stationed in Kansas may apply for the credit if they choose to move their legal residence.
“If I would have stayed in my (original) major, it would have been a good opportunity and something I would have looked into as a mechanical engineer,” said Rebecca Keating, junior in engineering who is from Missouri. “I come from a rural area, so moving back wouldn’t be that much of a change.”
Payments to recipients begin in annual installments in the fall, after county budgeting in the summer. Recipients will be required to file a W-9 tax form each year. In order to qualify, the resident has to be domiciled, or have established a permanent residence, in Kansas for one whole calendar year. Moving out of the county, even to another ROZ, negates the tax credit. A taxpayer can only file for the income tax credit until the bill ends in 2016.
Potential residents are also restricted to earning “less than $10,000 in any one year for five or more years immediately prior to establishing a domicile” in order to qualify. Money from Kansas-based farms or partnerships, although not earned directly, counts toward this income total.
