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Tool | October 2015

State-by-State Guide to Taxes on Retirees

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Missouri

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The Bottom Line
Map of Missouri

Mixed Tax Picture

The Show-Me State no longer taxes Social Security benefits for many taxpayers. Taxpayers may also qualify for exemptions on public and private pensions, subject to income limits. A 6% tax rate applies to taxable income of $9,000 or more. Sales taxes are reasonable. Some seniors may qualify for a property-tax credit.

State Sales Tax

4.225%. Prescription drugs are exempt; food that qualifies for the federal supplemental nutrition assistance program (SNAP) and is intended for home consumption is taxed at 1.225%. Cities and counties as well as special taxing districts (such as fire districts) may impose a local sales and use tax of up to 5%, but the average state combined levy is 7.81%, according to the Tax Foundation.

Income Tax Range

Low: 1.5% (on less than $1,000 of taxable income)

High: 6% (on more than $9,000 of taxable income)

Social Security

Social Security benefits are not taxed for single taxpayers with adjusted gross income of less than $85,000 and married couples with AGI of less than $100,000. Taxpayers who exceed those income limits may qualify for a partial exemption on their benefits.

Exemptions for Other Retirement Income

Single Missouri taxpayers with adjusted gross income of less than $85,000 and married couples with AGI of less than $100,000 may deduct a portion of their public retirement benefits, to the extent the amounts are included in their federal adjusted gross income. The total public pension exemption has an overall limit for each individual, and it is adjusted annually for inflation. The overall limit for 2014 was $36,442. Taxpayers who also qualify for the Social Security or Social Security Disability Deduction must reduce their public pension exemption by the amount of the Social Security or Social Security Disability Deduction.

Taxpayers with adjusted gross income of less than $32,000 if married filing jointly, $16,000 if married filing separately or $25,000 if single are eligible for a private pension exemption. Others who exceed the limits may receive a partial exemption, though taxpayers whose income exceeds the limit by more than the amount of their taxable private pension or $6,000 are not eligible for an exemption.

In 2015, the percentage of military income exempt from Missouri state tax increased to 90%. As of January 1, 2016, all military pension income will be tax-free.

IRAs

Taxable at ordinary income tax rates.

401(k)s and Other Defined-Contribution Employer Retirement Plans

Taxable at ordinary income tax rates.

Private Pensions

Taxpayers with adjusted gross income of less than $32,000 if married filing jointly, $16,000 if married filing separately or $25,000 if single are eligible for a private pension exemption. Others who exceed the limits may receive a partial exemption, though taxpayers whose income exceeds the limit by more than the amount of their taxable private pension or $6,000 are not eligible for an exemption.

Public Pensions

Single Missouri taxpayers with adjusted gross income of less than $85,000 and married couples with AGI of less than $100,000 may deduct a portion of their public retirement benefits, to the extent the amounts are included in their federal adjusted gross income. The total public pension exemption has an overall limit for each individual, and it is adjusted annually for inflation. The overall limit for 2014 was $36,442. Taxpayers who also qualify for the Social Security or Social Security Disability Deduction must reduce their public pension exemption by the amount of the Social Security or Social Security Disability Deduction.

In 2015, the percentage of military income exempt from Missouri state tax increased to 90%. As of January 1, 2016, all military pension income will be tax-free.

Property Taxes

Median property tax on Missouri's median home value of $133,200 is $1,364, according to the Tax Foundation.

Tax breaks for seniors: The Missouri Property Tax Credit Claim gives credit to certain senior citizens and disabled individuals for a portion of the real estate taxes or rent they have paid for the year. The credit is for a maximum of $750 for renters and $1,100 for owners who occupied their homes during the period being claimed. The actual credit is based on the amount of real estate taxes or rent paid and total household income.

Inheritance and
Estate Taxes

There is no inheritance tax or estate tax.

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