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Missouri Senate Bill SB620

Missouri 2025 Regular Session

Missouri Senate Bill SB620 Compare Versions

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22 EXPLANATION-Matter enclosed in bold-faced brackets [thus] in this bill is not enacted
33 and is intended to be omitted in the law.
44 FIRST REGULAR SESSION
55 SENATE BILL NO. 620
66 103RD GENERAL ASSEMBLY
77 INTRODUCED BY SENATOR GREGORY (15).
88 2445S.01I KRISTINA MARTIN, Secretary
99 AN ACT
1010 To repeal section 143.124, RSMo, and to enact in lieu thereof one new section relating to private
1111 pension taxation.
1212
1313 Be it enacted by the General Assembly of the State of Missouri, as follows:
1414 Section A. Section 143.124, RSMo, is repealed and one new 1
1515 section enacted in lieu thereof, to be known as section 143.124, 2
1616 to read as follows:3
1717 143.124. 1. Other provisions of law to the contrary 1
1818 notwithstanding, for tax years ending on or before December 2
1919 31, 2006, the total amount of all annuities, pensions, or 3
2020 retirement allowances above the amount of six thousand 4
2121 dollars annually provided by any law of this stat e, the 5
2222 United States, or any other state to any person except as 6
2323 provided in subsection 4 of this section, shall be subject 7
2424 to tax pursuant to the provisions of this chapter, in the 8
2525 same manner, to the same extent and under the same 9
2626 conditions as any other taxable income received by the 10
2727 person receiving it. For purposes of this section, 11
2828 "annuity, pension, retirement benefit, or retirement 12
2929 allowance" shall be defined as an annuity, pension or 13
3030 retirement allowance provided by the United States, this 14
3131 state, any other state or any political subdivision or 15
3232 agency or institution of this or any other state. For all 16
3333 tax years beginning on or after January 1, 1998, for 17
3434 purposes of this section, annuity, pension or retirement 18 SB 620 2
3535 allowance shall be defined to include 401(k) plans, deferred 19
3636 compensation plans, self -employed retirement plans, also 20
3737 known as Keogh plans, annuities from a defined pension plan 21
3838 and individual retirement arrangements, also known as IRAs, 22
3939 as described in the Internal Revenue Cod e, but not including 23
4040 Roth IRAs, as well as an annuity, pension or retirement 24
4141 allowance provided by the United States, this state, any 25
4242 other state or any political subdivision or agency or 26
4343 institution of this or any other state. An individual 27
4444 taxpayer shall only be allowed a maximum deduction equal to 28
4545 the amounts provided under this section for each taxpayer on 29
4646 the combined return. 30
4747 2. For the period beginning July 1, 1989, and ending 31
4848 December 31, 1989, there shall be subtracted from Missouri 32
4949 adjusted gross income for that period, determined pursuant 33
5050 to section 143.121, the first three thousand dollars of 34
5151 retirement benefits received by each taxpayer: 35
5252 (1) If the taxpayer's filing status is single, head of 36
5353 household or qualifying widow( er) and the taxpayer's 37
5454 Missouri adjusted gross income is less than twelve thousand 38
5555 five hundred dollars; or 39
5656 (2) If the taxpayer's filing status is married filing 40
5757 combined and their combined Missouri adjusted gross income 41
5858 is less than sixteen thou sand dollars; or 42
5959 (3) If the taxpayer's filing status is married filing 43
6060 separately and the taxpayer's Missouri adjusted gross income 44
6161 is less than eight thousand dollars. 45
6262 3. [For the tax years beginning on or after January 1, 46
6363 1990, but ending on or before December 31, 2006, ] There 47
6464 shall be subtracted from Missouri adjusted gross income, 48
6565 determined pursuant to section 143.121, [a maximum of the 49
6666 first six thousand dollars of retirement benefits received 50 SB 620 3
6767 by each taxpayer from sources other tha n privately funded 51
6868 sources, and for tax years beginning on or after January 1, 52
6969 1998, there shall be subtracted from Missouri adjusted gross 53
7070 income, determined pursuant to section 143.121, a maximum of 54
7171 the first one thousand dollars of any retirement al lowance 55
7272 received from any privately funded source for tax years 56
7373 beginning on or after January 1, 1998, but before January 1, 57
7474 1999, and a maximum of the first three thousand dollars of 58
7575 any retirement allowance received from any privately funded 59
7676 source for tax years beginning on or after January 1, 1999, 60
7777 but before January 1, 2000, and a maximum of the first four 61
7878 thousand dollars of any retirement allowance received from 62
7979 any privately funded source for tax years beginning on or 63
8080 after January 1, 2000, but before January 1, 2001, and a 64
8181 maximum of the first five thousand dollars of any retirement 65
8282 allowance received from any privately funded source for tax 66
8383 years beginning on or after January 1, 2001, but before 67
8484 January 1, 2002, and ] a maximum of the first six thousand 68
8585 dollars of any retirement allowance received by each 69
8686 taxpayer from any privately funded sources for tax years 70
8787 beginning on or after January 1, 2002 , but before January 1, 71
8888 2026, and a maximum of the first twelve thousand dollars of 72
8989 any retirement allowance received from any privately funded 73
9090 sources for tax years beginning on or after January 1, 74
9191 2026. A taxpayer shall be entitled to the maximum exemption 75
9292 provided by this subsection: 76
9393 (1) If the taxpayer's filing status is singl e, head of 77
9494 household or qualifying widow(er) and the taxpayer's 78
9595 Missouri adjusted gross income is less than twenty -five 79
9696 thousand dollars for all tax years ending on or before 80
9797 December 31, 2025, and less than fifty thousand dollars for 81
9898 all tax years beginning on or after January 1, 2026 ; or 82 SB 620 4
9999 (2) If the taxpayer's filing status is married filing 83
100100 combined and their combined Missouri adjusted gross income 84
101101 is less than thirty-two thousand dollars for all tax years 85
102102 ending on or before December 31, 20 25, and less than sixty - 86
103103 four thousand dollars for all tax years beginning on or 87
104104 after January 1, 2026 ; or 88
105105 (3) If the taxpayer's filing status is married filing 89
106106 separately and the taxpayer's Missouri adjusted gross income 90
107107 is less than sixteen thou sand dollars for all tax years 91
108108 ending on or before December 31, 2025, and less than thirty - 92
109109 two thousand six hundred dollars for all tax years beginning 93
110110 on or after January 1, 2026 . 94
111111 4. If a taxpayer's adjusted gross income exceeds the 95
112112 adjusted gross income ceiling for such taxpayer's filing 96
113113 status, as provided in subdivisions (1), (2) and (3) of 97
114114 subsection 3 of this section, such taxpayer shall be 98
115115 entitled to an exemption equal to the greater of zero or the 99
116116 maximum exemption provided in subsect ion 3 of this section 100
117117 reduced by one dollar for every dollar such taxpayer's 101
118118 income exceeds the ceiling for his or her filing status. 102
119119 5. For purposes of this subsection, the term "maximum 103
120120 Social Security benefit available" shall mean thirty -two 104
121121 thousand five hundred dollars for the tax year beginning on 105
122122 or after January 1, 2007, and for each subsequent tax year 106
123123 such amount shall be increased by the percentage increase in 107
124124 the Consumer Price Index for All Urban Consumers, or its 108
125125 successor index, as such index is defined and officially 109
126126 reported by the United States Department of Labor, or its 110
127127 successor agency. For the tax year beginning on or after 111
128128 January 1, 2007, but ending on or before December 31, 2007, 112
129129 there shall be subtracted from Miss ouri adjusted gross 113
130130 income, determined pursuant to section 143.121, a maximum of 114 SB 620 5
131131 an amount equal to the greater of: six thousand dollars in 115
132132 retirement benefits received from sources other than 116
133133 privately funded sources, to the extent such benefits are 117
134134 included in the taxpayer's federal adjusted gross income; or 118
135135 twenty percent of the retirement benefits received from 119
136136 sources other than privately funded sources in the tax year, 120
137137 but not to exceed the maximum Social Security benefit 121
138138 available for such tax year. For the tax year beginning on 122
139139 or after January 1, 2008, but ending on or before December 123
140140 31, 2008, there shall be subtracted from Missouri adjusted 124
141141 gross income, determined pursuant to section 143.121, a 125
142142 maximum of an amount equal to the gre ater of: six thousand 126
143143 dollars in retirement benefits received from sources other 127
144144 than privately funded sources, to the extent such benefits 128
145145 are included in the taxpayer's federal adjusted gross 129
146146 income; or thirty-five percent of the retirement benefits 130
147147 received from sources other than privately funded sources in 131
148148 the tax year, but not to exceed the maximum Social Security 132
149149 benefit available for such tax year. For the tax year 133
150150 beginning on or after January 1, 2009, but ending on or 134
151151 before December 31, 2009, there shall be subtracted from 135
152152 Missouri adjusted gross income, determined pursuant to 136
153153 section 143.121, a maximum of an amount equal to the greater 137
154154 of: six thousand dollars in retirement benefits received 138
155155 from sources other than privately funde d sources, to the 139
156156 extent such benefits are included in the taxpayer's federal 140
157157 adjusted gross income; or fifty percent of the retirement 141
158158 benefits received from sources other than privately funded 142
159159 sources in the tax year, but not to exceed the maximum 143
160160 Social Security benefit available for such tax year. For 144
161161 the tax year beginning on or after January 1, 2010, but 145
162162 ending on or before December 31, 2010, there shall be 146 SB 620 6
163163 subtracted from Missouri adjusted gross income, determined 147
164164 pursuant to section 143.12 1, a maximum of an amount equal to 148
165165 the greater of: six thousand dollars in retirement benefits 149
166166 received from sources other than privately funded sources, 150
167167 to the extent such benefits are included in the taxpayer's 151
168168 federal adjusted gross income; or sixt y-five percent of the 152
169169 retirement benefits received from sources other than 153
170170 privately funded sources in the tax year, but not to exceed 154
171171 the maximum Social Security benefit available for such tax 155
172172 year. For the tax year beginning on or after January 1, 156
173173 2011, but ending on or before December 31, 2011, there shall 157
174174 be subtracted from Missouri adjusted gross income, 158
175175 determined pursuant to section 143.121, a maximum of an 159
176176 amount equal to the greater of: six thousand dollars in 160
177177 retirement benefits receive d from sources other than 161
178178 privately funded sources, to the extent such benefits are 162
179179 included in the taxpayer's federal adjusted gross income; or 163
180180 eighty percent of the retirement benefits received from 164
181181 sources other than privately funded sources in the tax year, 165
182182 but not to exceed the maximum Social Security benefit 166
183183 available for such tax year. For all tax years beginning on 167
184184 or after January 1, 2012, there shall be subtracted from 168
185185 Missouri adjusted gross income, determined pursuant to 169
186186 section 143.121, a maximum of an amount equal to one hundred 170
187187 percent of the retirement benefits received from sources 171
188188 other than privately funded sources in the tax year, but not 172
189189 to exceed the maximum Social Security benefit available for 173
190190 such tax year. For all tax years beginning on or before 174
191191 December 31, 2023, a taxpayer shall be entitled to the 175
192192 maximum exemption provided by this subsection: 176 SB 620 7
193193 (1) If the taxpayer's filing status is married filing 177
194194 combined, and their combined Missouri adjusted gross income 178
195195 is equal to or less than one hundred thousand dollars; or 179
196196 (2) If the taxpayer's filing status is single, head of 180
197197 household, qualifying widow(er), or married filing 181
198198 separately, and the taxpayer's Missouri adjusted gross 182
199199 income is equal to or less t han eighty-five thousand dollars. 183
200200 For all tax years beginning on or after January 1, 2024, a 184
201201 taxpayer shall be entitled to the maximum exemption provided 185
202202 by this subsection regardless of the taxpayer's filing 186
203203 status or the amount of the taxpayer's Misso uri adjusted 187
204204 gross income. 188
205205 6. For all tax years beginning on or before December 189
206206 31, 2023, if a taxpayer's adjusted gross income exceeds the 190
207207 adjusted gross income ceiling for such taxpayer's filing 191
208208 status, as provided in subdivisions (1) and (2) o f 192
209209 subsection 5 of this section, such taxpayer shall be 193
210210 entitled to an exemption, less any applicable reduction 194
211211 provided under subsection 7 of this section, equal to the 195
212212 greater of zero or the maximum exemption provided in 196
213213 subsection 5 of this section reduced by one dollar for every 197
214214 dollar such taxpayer's income exceeds the ceiling for his or 198
215215 her filing status. 199
216216 7. For purposes of calculating the subtraction 200
217217 provided in subsection 5 of this section, such subtraction 201
218218 shall be decreased by an amo unt equal to any Social Security 202
219219 benefit exemption provided under section 143.125. 203
220220 8. For purposes of this section, any Social Security 204
221221 benefits otherwise included in Missouri adjusted gross 205
222222 income shall be subtracted; but Social Security benefits 206
223223 shall not be subtracted for purposes of other computations 207 SB 620 8
224224 pursuant to this chapter, and are not to be considered as 208
225225 retirement benefits for purposes of this section. 209
226226 9. The provisions of subdivisions (1) and (2) of 210
227227 subsection 3 of this section shall apply during all tax 211
228228 years in which the federal Internal Revenue Code provides 212
229229 exemption levels for calculation of the taxability of Social 213
230230 Security benefits that are the same as the levels in 214
231231 subdivisions (1) and (2) of subsection 3 of this sect ion. 215
232232 If the exemption levels for the calculation of the 216
233233 taxability of Social Security benefits are adjusted by 217
234234 applicable federal law or regulation, the exemption levels 218
235235 in subdivisions (1) and (2) of subsection 3 of this section 219
236236 shall be accordingly adjusted to the same exemption levels. 220
237237 10. The portion of a taxpayer's lump sum distribution 221
238238 from an annuity or other retirement plan not otherwise 222
239239 included in Missouri adjusted gross income as calculated 223
240240 pursuant to this chapter but subject to t axation under 224
241241 Internal Revenue Code Section 402 shall be taxed in an 225
242242 amount equal to ten percent of the taxpayer's federal 226
243243 liability on such distribution for the same tax year. 227
244244 11. For purposes of this section, retirement benefits 228
245245 received shall not include any withdrawals from qualified 229
246246 retirement plans which are subsequently rolled over into 230
247247 another retirement plan. 231
248248 12. The exemptions provided for in this section shall 232
249249 not affect the calculation of the income to be used to 233
250250 determine the property tax credit provided in sections 234
251251 135.010 to 135.035. 235
252252 13. The exemptions provided for in this section shall 236
253253 apply to any annuity, pension, or retirement allowance as 237
254254 defined in subsection 1 of this section to the extent that 238
255255 such amounts are included in the taxpayer's federal adjusted 239 SB 620 9
256256 gross income and not otherwise deducted from the taxpayer's 240
257257 federal adjusted gross income in the calculation of Missouri 241
258258 taxable income. This subsection shall not apply to any 242
259259 individual who qualifies u nder federal guidelines to be one 243
260260 hundred percent disabled. 244
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