Kansas Disaster Tax Relief Assistance Act

Kansas Disaster Tax Relief Assistance Act - Extends to businesses and individuals in certain Kansas counties declared by the President as major disaster areas under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (FEMA-1699-DR) by reason of severe storms and tornados beginning on May 4, 2007 (qualifying area) provisions of the Internal Revenue Code allowing: (1) suspension of certain limitations on personal casualty losses; (2) an extension of the period for replacing damaged property without recognizing gain; (3) an employee retention tax credit for affected businesses through 2007; (4) 50% bonus depreciation for affected businesses; (5) increased expensing of small business assets; (6) expensing of demolition and cleanup costs; (7) extended net operating loss carryback periods for losses attributable to storms and tornadoes and for public utility property disaster losses; (8) relaxed income verification requirements for tenants in low-income rental projects; and (9) penalty-free withdrawals and loans from individual retirement accounts and other tax-exempt pension plans.

Directs the Secretary of Education to carry out a program of student loan repayment for college graduates residing or employed in a qualifying area.

Amends the Internal Revenue Code with respect to individuals in a qualifying area to allow: (1) a tax credit for the lesser of 10% or $5,000 of the purchase price of a principal residence; (2) a capital loss deduction for the sale or exchange of a principal residence; and (3) the establishment of tax-exempt homestead accounts for the payment of education, business, medical, and other expenses.

Allows: (1) business-related tax credits for investment in certain buildings and small businesses in rural areas; and (2) accelerated deprecation of investment property in rural areas.