EXPLANATION-Matter enclosed in bold-faced brackets [thus] in this bill is not enacted
and is intended to be omitted in the law.
FIRST REGULAR SESSION
SENATE BILL NO. 620
103RD GENERAL ASSEMBLY
INTRODUCED BY SENATOR GREGORY (15).
2445S.01I KRISTINA MARTIN, Secretary
AN ACT
To repeal section 143.124, RSMo, and to enact in lieu thereof one new section relating to private
pension taxation.
Be it enacted by the General Assembly of the State of Missouri, as follows:
Section A. Section 143.124, RSMo, is repealed and one new 1
section enacted in lieu thereof, to be known as section 143.124, 2
to read as follows:3
143.124. 1. Other provisions of law to the contrary 1
notwithstanding, for tax years ending on or before December 2
31, 2006, the total amount of all annuities, pensions, or 3
retirement allowances above the amount of six thousand 4
dollars annually provided by any law of this stat e, the 5
United States, or any other state to any person except as 6
provided in subsection 4 of this section, shall be subject 7
to tax pursuant to the provisions of this chapter, in the 8
same manner, to the same extent and under the same 9
conditions as any other taxable income received by the 10
person receiving it. For purposes of this section, 11
"annuity, pension, retirement benefit, or retirement 12
allowance" shall be defined as an annuity, pension or 13
retirement allowance provided by the United States, this 14
state, any other state or any political subdivision or 15
agency or institution of this or any other state. For all 16
tax years beginning on or after January 1, 1998, for 17
purposes of this section, annuity, pension or retirement 18 SB 620 2
allowance shall be defined to include 401(k) plans, deferred 19
compensation plans, self -employed retirement plans, also 20
known as Keogh plans, annuities from a defined pension plan 21
and individual retirement arrangements, also known as IRAs, 22
as described in the Internal Revenue Cod e, but not including 23
Roth IRAs, as well as an annuity, pension or retirement 24
allowance provided by the United States, this state, any 25
other state or any political subdivision or agency or 26
institution of this or any other state. An individual 27
taxpayer shall only be allowed a maximum deduction equal to 28
the amounts provided under this section for each taxpayer on 29
the combined return. 30
2. For the period beginning July 1, 1989, and ending 31
December 31, 1989, there shall be subtracted from Missouri 32
adjusted gross income for that period, determined pursuant 33
to section 143.121, the first three thousand dollars of 34
retirement benefits received by each taxpayer: 35
(1) If the taxpayer's filing status is single, head of 36
household or qualifying widow( er) and the taxpayer's 37
Missouri adjusted gross income is less than twelve thousand 38
five hundred dollars; or 39
(2) If the taxpayer's filing status is married filing 40
combined and their combined Missouri adjusted gross income 41
is less than sixteen thou sand dollars; or 42
(3) If the taxpayer's filing status is married filing 43
separately and the taxpayer's Missouri adjusted gross income 44
is less than eight thousand dollars. 45
3. [For the tax years beginning on or after January 1, 46
1990, but ending on or before December 31, 2006, ] There 47
shall be subtracted from Missouri adjusted gross income, 48
determined pursuant to section 143.121, [a maximum of the 49
first six thousand dollars of retirement benefits received 50 SB 620 3
by each taxpayer from sources other tha n privately funded 51
sources, and for tax years beginning on or after January 1, 52
1998, there shall be subtracted from Missouri adjusted gross 53
income, determined pursuant to section 143.121, a maximum of 54
the first one thousand dollars of any retirement al lowance 55
received from any privately funded source for tax years 56
beginning on or after January 1, 1998, but before January 1, 57
1999, and a maximum of the first three thousand dollars of 58
any retirement allowance received from any privately funded 59
source for tax years beginning on or after January 1, 1999, 60
but before January 1, 2000, and a maximum of the first four 61
thousand dollars of any retirement allowance received from 62
any privately funded source for tax years beginning on or 63
after January 1, 2000, but before January 1, 2001, and a 64
maximum of the first five thousand dollars of any retirement 65
allowance received from any privately funded source for tax 66
years beginning on or after January 1, 2001, but before 67
January 1, 2002, and ] a maximum of the first six thousand 68
dollars of any retirement allowance received by each 69
taxpayer from any privately funded sources for tax years 70
beginning on or after January 1, 2002 , but before January 1, 71
2026, and a maximum of the first twelve thousand dollars of 72
any retirement allowance received from any privately funded 73
sources for tax years beginning on or after January 1, 74
2026. A taxpayer shall be entitled to the maximum exemption 75
provided by this subsection: 76
(1) If the taxpayer's filing status is singl e, head of 77
household or qualifying widow(er) and the taxpayer's 78
Missouri adjusted gross income is less than twenty -five 79
thousand dollars for all tax years ending on or before 80
December 31, 2025, and less than fifty thousand dollars for 81
all tax years beginning on or after January 1, 2026 ; or 82 SB 620 4
(2) If the taxpayer's filing status is married filing 83
combined and their combined Missouri adjusted gross income 84
is less than thirty-two thousand dollars for all tax years 85
ending on or before December 31, 20 25, and less than sixty - 86
four thousand dollars for all tax years beginning on or 87
after January 1, 2026 ; or 88
(3) If the taxpayer's filing status is married filing 89
separately and the taxpayer's Missouri adjusted gross income 90
is less than sixteen thou sand dollars for all tax years 91
ending on or before December 31, 2025, and less than thirty - 92
two thousand six hundred dollars for all tax years beginning 93
on or after January 1, 2026 . 94
4. If a taxpayer's adjusted gross income exceeds the 95
adjusted gross income ceiling for such taxpayer's filing 96
status, as provided in subdivisions (1), (2) and (3) of 97
subsection 3 of this section, such taxpayer shall be 98
entitled to an exemption equal to the greater of zero or the 99
maximum exemption provided in subsect ion 3 of this section 100
reduced by one dollar for every dollar such taxpayer's 101
income exceeds the ceiling for his or her filing status. 102
5. For purposes of this subsection, the term "maximum 103
Social Security benefit available" shall mean thirty -two 104
thousand five hundred dollars for the tax year beginning on 105
or after January 1, 2007, and for each subsequent tax year 106
such amount shall be increased by the percentage increase in 107
the Consumer Price Index for All Urban Consumers, or its 108
successor index, as such index is defined and officially 109
reported by the United States Department of Labor, or its 110
successor agency. For the tax year beginning on or after 111
January 1, 2007, but ending on or before December 31, 2007, 112
there shall be subtracted from Miss ouri adjusted gross 113
income, determined pursuant to section 143.121, a maximum of 114 SB 620 5
an amount equal to the greater of: six thousand dollars in 115
retirement benefits received from sources other than 116
privately funded sources, to the extent such benefits are 117
included in the taxpayer's federal adjusted gross income; or 118
twenty percent of the retirement benefits received from 119
sources other than privately funded sources in the tax year, 120
but not to exceed the maximum Social Security benefit 121
available for such tax year. For the tax year beginning on 122
or after January 1, 2008, but ending on or before December 123
31, 2008, there shall be subtracted from Missouri adjusted 124
gross income, determined pursuant to section 143.121, a 125
maximum of an amount equal to the gre ater of: six thousand 126
dollars in retirement benefits received from sources other 127
than privately funded sources, to the extent such benefits 128
are included in the taxpayer's federal adjusted gross 129
income; or thirty-five percent of the retirement benefits 130
received from sources other than privately funded sources in 131
the tax year, but not to exceed the maximum Social Security 132
benefit available for such tax year. For the tax year 133
beginning on or after January 1, 2009, but ending on or 134
before December 31, 2009, there shall be subtracted from 135
Missouri adjusted gross income, determined pursuant to 136
section 143.121, a maximum of an amount equal to the greater 137
of: six thousand dollars in retirement benefits received 138
from sources other than privately funde d sources, to the 139
extent such benefits are included in the taxpayer's federal 140
adjusted gross income; or fifty percent of the retirement 141
benefits received from sources other than privately funded 142
sources in the tax year, but not to exceed the maximum 143
Social Security benefit available for such tax year. For 144
the tax year beginning on or after January 1, 2010, but 145
ending on or before December 31, 2010, there shall be 146 SB 620 6
subtracted from Missouri adjusted gross income, determined 147
pursuant to section 143.12 1, a maximum of an amount equal to 148
the greater of: six thousand dollars in retirement benefits 149
received from sources other than privately funded sources, 150
to the extent such benefits are included in the taxpayer's 151
federal adjusted gross income; or sixt y-five percent of the 152
retirement benefits received from sources other than 153
privately funded sources in the tax year, but not to exceed 154
the maximum Social Security benefit available for such tax 155
year. For the tax year beginning on or after January 1, 156
2011, but ending on or before December 31, 2011, there shall 157
be subtracted from Missouri adjusted gross income, 158
determined pursuant to section 143.121, a maximum of an 159
amount equal to the greater of: six thousand dollars in 160
retirement benefits receive d from sources other than 161
privately funded sources, to the extent such benefits are 162
included in the taxpayer's federal adjusted gross income; or 163
eighty percent of the retirement benefits received from 164
sources other than privately funded sources in the tax year, 165
but not to exceed the maximum Social Security benefit 166
available for such tax year. For all tax years beginning on 167
or after January 1, 2012, there shall be subtracted from 168
Missouri adjusted gross income, determined pursuant to 169
section 143.121, a maximum of an amount equal to one hundred 170
percent of the retirement benefits received from sources 171
other than privately funded sources in the tax year, but not 172
to exceed the maximum Social Security benefit available for 173
such tax year. For all tax years beginning on or before 174
December 31, 2023, a taxpayer shall be entitled to the 175
maximum exemption provided by this subsection: 176 SB 620 7
(1) If the taxpayer's filing status is married filing 177
combined, and their combined Missouri adjusted gross income 178
is equal to or less than one hundred thousand dollars; or 179
(2) If the taxpayer's filing status is single, head of 180
household, qualifying widow(er), or married filing 181
separately, and the taxpayer's Missouri adjusted gross 182
income is equal to or less t han eighty-five thousand dollars. 183
For all tax years beginning on or after January 1, 2024, a 184
taxpayer shall be entitled to the maximum exemption provided 185
by this subsection regardless of the taxpayer's filing 186
status or the amount of the taxpayer's Misso uri adjusted 187
gross income. 188
6. For all tax years beginning on or before December 189
31, 2023, if a taxpayer's adjusted gross income exceeds the 190
adjusted gross income ceiling for such taxpayer's filing 191
status, as provided in subdivisions (1) and (2) o f 192
subsection 5 of this section, such taxpayer shall be 193
entitled to an exemption, less any applicable reduction 194
provided under subsection 7 of this section, equal to the 195
greater of zero or the maximum exemption provided in 196
subsection 5 of this section reduced by one dollar for every 197
dollar such taxpayer's income exceeds the ceiling for his or 198
her filing status. 199
7. For purposes of calculating the subtraction 200
provided in subsection 5 of this section, such subtraction 201
shall be decreased by an amo unt equal to any Social Security 202
benefit exemption provided under section 143.125. 203
8. For purposes of this section, any Social Security 204
benefits otherwise included in Missouri adjusted gross 205
income shall be subtracted; but Social Security benefits 206
shall not be subtracted for purposes of other computations 207 SB 620 8
pursuant to this chapter, and are not to be considered as 208
retirement benefits for purposes of this section. 209
9. The provisions of subdivisions (1) and (2) of 210
subsection 3 of this section shall apply during all tax 211
years in which the federal Internal Revenue Code provides 212
exemption levels for calculation of the taxability of Social 213
Security benefits that are the same as the levels in 214
subdivisions (1) and (2) of subsection 3 of this sect ion. 215
If the exemption levels for the calculation of the 216
taxability of Social Security benefits are adjusted by 217
applicable federal law or regulation, the exemption levels 218
in subdivisions (1) and (2) of subsection 3 of this section 219
shall be accordingly adjusted to the same exemption levels. 220
10. The portion of a taxpayer's lump sum distribution 221
from an annuity or other retirement plan not otherwise 222
included in Missouri adjusted gross income as calculated 223
pursuant to this chapter but subject to t axation under 224
Internal Revenue Code Section 402 shall be taxed in an 225
amount equal to ten percent of the taxpayer's federal 226
liability on such distribution for the same tax year. 227
11. For purposes of this section, retirement benefits 228
received shall not include any withdrawals from qualified 229
retirement plans which are subsequently rolled over into 230
another retirement plan. 231
12. The exemptions provided for in this section shall 232
not affect the calculation of the income to be used to 233
determine the property tax credit provided in sections 234
135.010 to 135.035. 235
13. The exemptions provided for in this section shall 236
apply to any annuity, pension, or retirement allowance as 237
defined in subsection 1 of this section to the extent that 238
such amounts are included in the taxpayer's federal adjusted 239 SB 620 9
gross income and not otherwise deducted from the taxpayer's 240
federal adjusted gross income in the calculation of Missouri 241
taxable income. This subsection shall not apply to any 242
individual who qualifies u nder federal guidelines to be one 243
hundred percent disabled. 244