SECONDREGULARSESSION
HOUSEBILLNO.2635
101STGENERALASSEMBLY
INTRODUCEDBYREPRESENTATIVEGREGORY(96).
4962H.01I DANARADEMANMILLER,ChiefClerk
ANACT
Torepealsections143.123and143.124,RSMo,andtoenactinlieuthereoftwonewsections
relatingtoincometax.
BeitenactedbytheGeneralAssemblyofthestateofMissouri,asfollows:
SectionA.Sections143.123and143.124,RSMo,arerepealedandtwonewsections
2enactedinlieuthereof,tobeknownassections143.123and143.124,toreadasfollows:
143.123.1.Anysixthousanddollarsubtractionprovidedbylawforannuities,
2pensions,andretirementallowancesintotalpertaxpayer,ashereafterprovidedbysubsequent
3law,shallbeimplementedinamaximumamountofsixthousanddollarsperyear,orthree
4thousanddollarsforasix-monthperiod.
5 2.Inadditiontoallothersubtractionsauthorizedunderthissectionand
6notwithstandinganyprovisionofthissectionoranyotherprovisionoflawtothe
7contrary,foralltaxyearsbeginningonorafterJanuary1,2023,thereshallbe
8subtractedfromMissouriadjustedgrossincome,determinedundersection143.121,the
9totalamountofanyretirementbenefitsreceivedbyataxpayersixty-fiveyearsofageor
10older,totheextentthatsuchamountisincludedinsuchtaxpayer'sfederaladjusted
11grossincomeandnototherwisedeductedfromthetaxpayer'sfederaladjustedgross
12incomeinthecalculationofMissouritaxableincome.Forpurposesofthissubsection,
13theterm"retirementbenefits"shallinclude,butnotbelimitedto,anywithdrawalsor
14distributionsfromanyretirementaccount.
143.124.1.Otherprovisionsoflawtothecontrarynotwithstanding,fortaxyears
2endingonorbeforeDecember31,2006,thetotalamountofallannuities,pensions,or
3retirementallowancesabovetheamountofsixthousanddollarsannuallyprovidedbyanylaw
EXPLANATION—Matterenclosedinbold-facedbrackets[thus] intheabovebillisnotenactedandis
intendedtobeomittedfromthelaw.Matterinbold-facetypeintheabovebillisproposedlanguage. 4ofthisstate,theUnitedStates,oranyotherstatetoanypersonexceptasprovidedin
5subsection4ofthissection,shallbesubjecttotaxpursuanttotheprovisionsofthischapter,
6inthesamemanner,tothesameextentandunderthesameconditionsasanyothertaxable
7incomereceivedbythepersonreceivingit.Forpurposesofthissection,"annuity,pension,
8retirementbenefit,orretirementallowance"shallbedefinedasanannuity,pensionor
9retirementallowanceprovidedbytheUnitedStates,thisstate,anyotherstateoranypolitical
10subdivisionoragencyorinstitutionofthisoranyotherstate.Foralltaxyearsbeginningon
11orafterJanuary1,1998,forpurposesofthissection,annuity,pensionorretirementallowance
12shallbedefinedtoinclude401(k)plans,deferredcompensationplans,self-employed
13retirementplans,alsoknownasKeoghplans,annuitiesfromadefinedpensionplanand
14individualretirementarrangements,alsoknownasIRAs,asdescribedintheInternalRevenue
15Code,butnotincludingRothIRAs,aswellasanannuity,pensionorretirementallowance
16providedbytheUnitedStates,thisstate,anyotherstateoranypoliticalsubdivisionoragency
17orinstitutionofthisoranyotherstate.Anindividualtaxpayershallonlybealloweda
18maximumdeductionequaltotheamountsprovidedunderthissectionforeachtaxpayeron
19thecombinedreturn.
20 2.FortheperiodbeginningJuly1,1989,andendingDecember31,1989,thereshall
21besubtractedfromMissouriadjustedgrossincomeforthatperiod,determinedpursuantto
22section143.121,thefirstthreethousanddollarsofretirementbenefitsreceivedbyeach
23taxpayer:
24 (1)Ifthetaxpayer'sfilingstatusissingle,headofhouseholdorqualifyingwidow(er)
25andthetaxpayer'sMissouriadjustedgrossincomeislessthantwelvethousandfivehundred
26dollars;or
27 (2)Ifthetaxpayer'sfilingstatusismarriedfilingcombinedandtheircombined
28Missouriadjustedgrossincomeislessthansixteenthousanddollars;or
29 (3)Ifthetaxpayer'sfilingstatusismarriedfilingseparatelyandthetaxpayer's
30Missouriadjustedgrossincomeislessthaneightthousanddollars.
31 3.ForthetaxyearsbeginningonorafterJanuary1,1990,butendingonorbefore
32December31,2006,thereshallbesubtractedfromMissouriadjustedgrossincome,
33determinedpursuanttosection143.121,amaximumofthefirstsixthousanddollarsof
34retirementbenefitsreceivedbyeachtaxpayerfromsourcesotherthanprivatelyfunded
35sources,andfortaxyearsbeginningonorafterJanuary1,1998,thereshallbesubtracted
36fromMissouriadjustedgrossincome,determinedpursuanttosection143.121,amaximumof
37thefirstonethousanddollarsofanyretirementallowancereceivedfromanyprivatelyfunded
38sourcefortaxyearsbeginningonorafterJanuary1,1998,butbeforeJanuary1,1999,anda
39maximumofthefirstthreethousanddollarsofanyretirementallowancereceivedfromany
40privatelyfundedsourcefortaxyearsbeginningonorafterJanuary1,1999,butbefore
HB2635 2 41January1,2000,andamaximumofthefirstfourthousanddollarsofanyretirement
42allowancereceivedfromanyprivatelyfundedsourcefortaxyearsbeginningonorafter
43January1,2000,butbeforeJanuary1,2001,andamaximumofthefirstfivethousanddollars
44ofanyretirementallowancereceivedfromanyprivatelyfundedsourcefortaxyears
45beginningonorafterJanuary1,2001,butbeforeJanuary1,2002,andamaximumofthefirst
46sixthousanddollarsofanyretirementallowancereceivedfromanyprivatelyfundedsources
47fortaxyearsbeginningonorafterJanuary1,2002.Ataxpayershallbeentitledtothe
48maximumexemptionprovidedbythissubsection:
49 (1)Ifthetaxpayer'sfilingstatusissingle,headofhouseholdorqualifyingwidow(er)
50andthetaxpayer'sMissouriadjustedgrossincomeislessthantwenty-fivethousanddollars;
51or
52 (2)Ifthetaxpayer'sfilingstatusismarriedfilingcombinedandtheircombined
53Missouriadjustedgrossincomeislessthanthirty-twothousanddollars;or
54 (3)Ifthetaxpayer'sfilingstatusismarriedfilingseparatelyandthetaxpayer's
55Missouriadjustedgrossincomeislessthansixteenthousanddollars.
56 4.Ifataxpayer'sadjustedgrossincomeexceedstheadjustedgrossincomeceilingfor
57suchtaxpayer'sfilingstatus,asprovidedinsubdivisions(1),(2)and(3)ofsubsection3ofthis
58section,suchtaxpayershallbeentitledtoanexemptionequaltothegreaterofzeroorthe
59maximumexemptionprovidedinsubsection3ofthissectionreducedbyonedollarforevery
60dollarsuchtaxpayer'sincomeexceedstheceilingforhisorherfilingstatus.
61 5.Forpurposesofthissubsection,theterm"maximumSocialSecuritybenefit
62available"shallmeanthirty-twothousandfivehundreddollarsforthetaxyearbeginningon
63orafterJanuary1,2007,andforeachsubsequenttaxyearsuchamountshallbeincreasedby
64thepercentageincreaseintheConsumerPriceIndexforAllUrbanConsumers,orits
65successorindex,assuchindexisdefinedandofficiallyreportedbytheUnitedStates
66DepartmentofLabor,oritssuccessoragency.ForthetaxyearbeginningonorafterJanuary
671,2007,butendingonorbeforeDecember31,2007,thereshallbesubtractedfromMissouri
68adjustedgrossincome,determinedpursuanttosection143.121,amaximumofanamount
69equaltothegreaterof:sixthousanddollarsinretirementbenefitsreceivedfromsourcesother
70thanprivatelyfundedsources,totheextentsuchbenefitsareincludedinthetaxpayer'sfederal
71adjustedgrossincome;ortwentypercentoftheretirementbenefitsreceivedfromsources
72otherthanprivatelyfundedsourcesinthetaxyear,butnottoexceedthemaximumSocial
73Securitybenefitavailableforsuchtaxyear.ForthetaxyearbeginningonorafterJanuary1,
742008,butendingonorbeforeDecember31,2008,thereshallbesubtractedfromMissouri
75adjustedgrossincome,determinedpursuanttosection143.121,amaximumofanamount
76equaltothegreaterof:sixthousanddollarsinretirementbenefitsreceivedfromsourcesother
77thanprivatelyfundedsources,totheextentsuchbenefitsareincludedinthetaxpayer'sfederal
HB2635 3 78adjustedgrossincome;orthirty-fivepercentoftheretirementbenefitsreceivedfromsources
79otherthanprivatelyfundedsourcesinthetaxyear,butnottoexceedthemaximumSocial
80Securitybenefitavailableforsuchtaxyear.ForthetaxyearbeginningonorafterJanuary1,
812009,butendingonorbeforeDecember31,2009,thereshallbesubtractedfromMissouri
82adjustedgrossincome,determinedpursuanttosection143.121,amaximumofanamount
83equaltothegreaterof:sixthousanddollarsinretirementbenefitsreceivedfromsourcesother
84thanprivatelyfundedsources,totheextentsuchbenefitsareincludedinthetaxpayer'sfederal
85adjustedgrossincome;orfiftypercentoftheretirementbenefitsreceivedfromsourcesother
86thanprivatelyfundedsourcesinthetaxyear,butnottoexceedthemaximumSocialSecurity
87benefitavailableforsuchtaxyear.ForthetaxyearbeginningonorafterJanuary1,2010,but
88endingonorbeforeDecember31,2010,thereshallbesubtractedfromMissouriadjusted
89grossincome,determinedpursuanttosection143.121,amaximumofanamountequaltothe
90greaterof:sixthousanddollarsinretirementbenefitsreceivedfromsourcesotherthan
91privatelyfundedsources,totheextentsuchbenefitsareincludedinthetaxpayer'sfederal
92adjustedgrossincome;orsixty-fivepercentoftheretirementbenefitsreceivedfromsources
93otherthanprivatelyfundedsourcesinthetaxyear,butnottoexceedthemaximumSocial
94Securitybenefitavailableforsuchtaxyear.ForthetaxyearbeginningonorafterJanuary1,
952011,butendingonorbeforeDecember31,2011,thereshallbesubtractedfromMissouri
96adjustedgrossincome,determinedpursuanttosection143.121,amaximumofanamount
97equaltothegreaterof:sixthousanddollarsinretirementbenefitsreceivedfromsourcesother
98thanprivatelyfundedsources,totheextentsuchbenefitsareincludedinthetaxpayer'sfederal
99adjustedgrossincome;oreightypercentoftheretirementbenefitsreceivedfromsources
100otherthanprivatelyfundedsourcesinthetaxyear,butnottoexceedthemaximumSocial
101Securitybenefitavailableforsuchtaxyear.ForalltaxyearsbeginningonorafterJanuary1,
1022012,thereshallbesubtractedfromMissouriadjustedgrossincome,determinedpursuantto
103section143.121,amaximumofanamountequaltoonehundredpercentoftheretirement
104benefitsreceivedfromsourcesotherthanprivatelyfundedsourcesinthetaxyear,butnotto
105exceedthemaximumSocialSecuritybenefitavailableforsuchtaxyear.Ataxpayershallbe
106entitledtothemaximumexemptionprovidedbythissubsection:
107 (1)Ifthetaxpayer'sfilingstatusismarriedfilingcombined,andtheircombined
108Missouriadjustedgrossincomeisequaltoorlessthanonehundredthousanddollars;or
109 (2)Ifthetaxpayer'sfilingstatusissingle,headofhousehold,qualifyingwidow(er),
110ormarriedfilingseparately,andthetaxpayer'sMissouriadjustedgrossincomeisequaltoor
111lessthaneighty-fivethousanddollars.
112 6.Ifataxpayer'sadjustedgrossincomeexceedstheadjustedgrossincomeceilingfor
113suchtaxpayer'sfilingstatus,asprovidedinsubdivisions(1)and(2)ofsubsection5ofthis
114section,suchtaxpayershallbeentitledtoanexemption,lessanyapplicablereduction
HB2635 4 115providedundersubsection7ofthissection,equaltothegreaterofzeroorthemaximum
116exemptionprovidedinsubsection5ofthissectionreducedbyonedollarforeverydollarsuch
117taxpayer'sincomeexceedstheceilingforhisorherfilingstatus.
118 7.Forpurposesofcalculatingthesubtractionprovidedinsubsection5ofthissection,
119suchsubtractionshallbedecreasedbyanamountequaltoanySocialSecuritybenefit
120exemptionprovidedundersection143.125.
121 8.Forpurposesofthissection,anySocialSecuritybenefitsotherwiseincludedin
122Missouriadjustedgrossincomeshallbesubtracted;butSocialSecuritybenefitsshallnotbe
123subtractedforpurposesofothercomputationspursuanttothischapter,andarenottobe
124consideredasretirementbenefitsforpurposesofthissection.
125 9.Theprovisionsofsubdivisions(1)and(2)ofsubsection3ofthissectionshall
126applyduringalltaxyearsinwhichthefederalInternalRevenueCodeprovidesexemption
127levelsforcalculationofthetaxabilityofSocialSecuritybenefitsthatarethesameasthe
128levelsinsubdivisions(1)and(2)ofsubsection3ofthissection.Iftheexemptionlevelsfor
129thecalculationofthetaxabilityofSocialSecuritybenefitsareadjustedbyapplicablefederal
130laworregulation,theexemptionlevelsinsubdivisions(1)and(2)ofsubsection3ofthis
131sectionshallbeaccordinglyadjustedtothesameexemptionlevels.
132 10.Theportionofataxpayer'slumpsumdistributionfromanannuityorother
133retirementplannototherwiseincludedinMissouriadjustedgrossincomeascalculated
134pursuanttothischapterbutsubjecttotaxationunderInternalRevenueCodeSection402shall
135betaxedinanamountequaltotenpercentofthetaxpayer'sfederalliabilityonsuch
136distributionforthesametaxyear.
137 11.Forpurposesofthissection,retirementbenefitsreceivedshallnotincludeany
138withdrawalsfromqualifiedretirementplanswhicharesubsequentlyrolledoverintoanother
139retirementplan.
140 12.Theexemptionsprovidedforinthissectionshallnotaffectthecalculationofthe
141incometobeusedtodeterminethepropertytaxcreditprovidedinsections135.010to
142135.035.
143 13.Theexemptionsprovidedforinthissectionshallapplytoanyannuity,pension,or
144retirementallowanceasdefinedinsubsection1ofthissectiontotheextentthatsuchamounts
145areincludedinthetaxpayer'sfederaladjustedgrossincomeandnototherwisedeductedfrom
146thetaxpayer'sfederaladjustedgrossincomeinthecalculationofMissouritaxableincome.
147Thissubsectionshallnotapplytoanyindividualwhoqualifiesunderfederalguidelinestobe
148onehundredpercentdisabled.
149 14.Inadditiontoallothersubtractionsauthorizedunderthissectionand
150notwithstandinganyprovisionofthissectionoranyotherprovisionoflawtothe
151contrary,foralltaxyearsbeginningonorafterJanuary1,2023,thereshallbe
HB2635 5 152subtractedfromMissouriadjustedgrossincome,determinedundersection143.121,the
153totalamountofanyretirementbenefitsreceivedbyataxpayersixty-fiveyearsofageor
154older,totheextentthatsuchamountisincludedinsuchtaxpayer'sfederaladjusted
155grossincomeandnototherwisedeductedfromthetaxpayer'sfederaladjustedgross
156incomeinthecalculationofMissouritaxableincome.Forpurposesofthissubsection,
157theterm"retirementbenefits"shallinclude,butnotbelimitedto,anywithdrawalsor
158distributionsfromanyretirementaccount.
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