HOUSE BILL NO. 2059 103RD GENERAL ASSEMBLY
INTRODUCED BY REPRESENTATIVE VERNETTI.
3887H.01I JOSEPH ENGLER, Chief Clerk
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Section A. Section 143.124, RSMo, is repealed and one new section enacted in lieu 2 thereof, to be known as section 143.124, to read as follows: 143.124. 1. Other provisions of law to the contrary notwithstanding, for tax years 2 ending on or before December 31, 2006, the total amount of all annuities, pensions, or 3 retirement allowances above the amount of six thousand dollars annually provided by any law 4 of this state, the United States, or any other state to any person except as provided in 5 subsection 4 of this section, shall be subject to tax pursuant to the provisions of this chapter, 6 in the same manner, to the same extent and under the same conditions as any other taxable 7 income received by the person receiving it. For purposes of this section, "annuity, pension, 8 retirement benefit, or retirement allowance" shall be defined as an annuity, pension or 9 retirement allowance provided by the United States, this state, any other state or any political 10 subdivision or agency or institution of this or any other state. For all tax years beginning on 11 or after January 1, 1998, for purposes of this section, annuity, pension or retirement allowance 12 shall be defined to include 401(k) plans, deferred compensation plans, self-employed 13 retirement plans, also known as Keogh plans, annuities from a defined pension plan and 14 individual retirement arrangements, also known as IRAs, as described in the Internal Revenue 15 Code, but not including Roth IRAs, as well as an annuity, pension or retirement allowance 16 provided by the United States, this state, any other state or any political subdivision or agency 17 or institution of this or any other state. An individual taxpayer shall only be allowed a
EXPLANATION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is intended to be omitted from the law. Matter in bold-face type in the above bill is proposed language. HB 2059 2
18 maximum deduction equal to the amounts provided under this section for each taxpayer on 19 the combined return. 20 2. For the period beginning July 1, 1989, and ending December 31, 1989, there shall 21 be subtracted from Missouri adjusted gross income for that period, determined pursuant to 22 section 143.121, the first three thousand dollars of retirement benefits received by each 23 taxpayer: 24 (1) If the taxpayer's filing status is single, head of household or qualifying widow(er) 25 and the taxpayer's Missouri adjusted gross income is less than twelve thousand five hundred 26 dollars; or 27 (2) If the taxpayer's filing status is married filing combined and their combined 28 Missouri adjusted gross income is less than sixteen thousand dollars; or 29 (3) If the taxpayer's filing status is married filing separately and the taxpayer's 30 Missouri adjusted gross income is less than eight thousand dollars. 31 3. [For the tax years beginning on or after January 1, 1990, but ending on or before 32 December 31, 2006,] There shall be subtracted from Missouri adjusted gross income, 33 determined pursuant to section 143.121, [a maximum of the first six thousand dollars of 34 retirement benefits received by each taxpayer from sources other than privately funded 35 sources, and for tax years beginning on or after January 1, 1998, there shall be subtracted 36 from Missouri adjusted gross income, determined pursuant to section 143.121, a maximum of 37 the first one thousand dollars of any retirement allowance received from any privately funded 38 source for tax years beginning on or after January 1, 1998, but before January 1, 1999, and a 39 maximum of the first three thousand dollars of any retirement allowance received from any 40 privately funded source for tax years beginning on or after January 1, 1999, but before 41 January 1, 2000, and a maximum of the first four thousand dollars of any retirement 42 allowance received from any privately funded source for tax years beginning on or after 43 January 1, 2000, but before January 1, 2001, and a maximum of the first five thousand dollars 44 of any retirement allowance received from any privately funded source for tax years 45 beginning on or after January 1, 2001, but before January 1, 2002, and] a maximum of the 46 first six thousand dollars of any retirement allowance received by each taxpayer from any 47 privately funded sources for tax years beginning on or after January 1, 2002, but before 48 January 1, 2027, and a maximum of the first twelve thousand dollars of any retirement 49 allowance received from any privately funded sources for tax years beginning on or 50 after January 1, 2027. A taxpayer shall be entitled to the maximum exemption provided by 51 this subsection: 52 (1) If the taxpayer's filing status is single, head of household or qualifying widow(er) 53 and the taxpayer's Missouri adjusted gross income is less than twenty-five thousand dollars HB 2059 3
54 for all tax years beginning on or before December 31, 2026, and less than fifty thousand 55 dollars for all tax years beginning on or after January 1, 2027; or 56 (2) If the taxpayer's filing status is married filing combined and their combined 57 Missouri adjusted gross income is less than thirty-two thousand dollars for all tax years 58 beginning on or before December 31, 2026, and less than sixty-four thousand dollars for 59 all tax years beginning on or after January 1, 2027; or 60 (3) If the taxpayer's filing status is married filing separately and the taxpayer's 61 Missouri adjusted gross income is less than sixteen thousand dollars for all tax years 62 beginning on or before December 31, 2026, and less than thirty-two thousand six 63 hundred dollars for all tax years beginning on or after January 1, 2027. 64 4. If a taxpayer's adjusted gross income exceeds the adjusted gross income ceiling for 65 such taxpayer's filing status, as provided in subdivisions (1), (2) and (3) of subsection 3 of this 66 section, such taxpayer shall be entitled to an exemption equal to the greater of zero or the 67 maximum exemption provided in subsection 3 of this section reduced by one dollar for every 68 dollar such taxpayer's income exceeds the ceiling for his or her filing status. 69 5. For purposes of this subsection, the term "maximum Social Security benefit 70 available" shall mean thirty-two thousand five hundred dollars for the tax year beginning on 71 or after January 1, 2007, and for each subsequent tax year such amount shall be increased by 72 the percentage increase in the Consumer Price Index for All Urban Consumers, or its 73 successor index, as such index is defined and officially reported by the United States 74 Department of Labor, or its successor agency. For the tax year beginning on or after January 75 1, 2007, but ending on or before December 31, 2007, there shall be subtracted from Missouri 76 adjusted gross income, determined pursuant to section 143.121, a maximum of an amount 77 equal to the greater of: six thousand dollars in retirement benefits received from sources other 78 than privately funded sources, to the extent such benefits are included in the taxpayer's federal 79 adjusted gross income; or twenty percent of the retirement benefits received from sources 80 other than privately funded sources in the tax year, but not to exceed the maximum Social 81 Security benefit available for such tax year. For the tax year beginning on or after January 1, 82 2008, but ending on or before December 31, 2008, there shall be subtracted from Missouri 83 adjusted gross income, determined pursuant to section 143.121, a maximum of an amount 84 equal to the greater of: six thousand dollars in retirement benefits received from sources other 85 than privately funded sources, to the extent such benefits are included in the taxpayer's federal 86 adjusted gross income; or thirty-five percent of the retirement benefits received from sources 87 other than privately funded sources in the tax year, but not to exceed the maximum Social 88 Security benefit available for such tax year. For the tax year beginning on or after January 1, 89 2009, but ending on or before December 31, 2009, there shall be subtracted from Missouri 90 adjusted gross income, determined pursuant to section 143.121, a maximum of an amount HB 2059 4
91 equal to the greater of: six thousand dollars in retirement benefits received from sources other 92 than privately funded sources, to the extent such benefits are included in the taxpayer's federal 93 adjusted gross income; or fifty percent of the retirement benefits received from sources other 94 than privately funded sources in the tax year, but not to exceed the maximum Social Security 95 benefit available for such tax year. For the tax year beginning on or after January 1, 2010, but 96 ending on or before December 31, 2010, there shall be subtracted from Missouri adjusted 97 gross income, determined pursuant to section 143.121, a maximum of an amount equal to the 98 greater of: six thousand dollars in retirement benefits received from sources other than 99 privately funded sources, to the extent such benefits are included in the taxpayer's federal 100 adjusted gross income; or sixty-five percent of the retirement benefits received from sources 101 other than privately funded sources in the tax year, but not to exceed the maximum Social 102 Security benefit available for such tax year. For the tax year beginning on or after January 1, 103 2011, but ending on or before December 31, 2011, there shall be subtracted from Missouri 104 adjusted gross income, determined pursuant to section 143.121, a maximum of an amount 105 equal to the greater of: six thousand dollars in retirement benefits received from sources other 106 than privately funded sources, to the extent such benefits are included in the taxpayer's federal 107 adjusted gross income; or eighty percent of the retirement benefits received from sources 108 other than privately funded sources in the tax year, but not to exceed the maximum Social 109 Security benefit available for such tax year. For all tax years beginning on or after January 1, 110 2012, there shall be subtracted from Missouri adjusted gross income, determined pursuant to 111 section 143.121, a maximum of an amount equal to one hundred percent of the retirement 112 benefits received from sources other than privately funded sources in the tax year, but not to 113 exceed the maximum Social Security benefit available for such tax year. For all tax years 114 beginning on or before December 31, 2023, a taxpayer shall be entitled to the maximum 115 exemption provided by this subsection: 116 (1) If the taxpayer's filing status is married filing combined, and their combined 117 Missouri adjusted gross income is equal to or less than one hundred thousand dollars; or 118 (2) If the taxpayer's filing status is single, head of household, qualifying widow(er), 119 or married filing separately, and the taxpayer's Missouri adjusted gross income is equal to or 120 less than eighty-five thousand dollars. 121 122 For all tax years beginning on or after January 1, 2024, a taxpayer shall be entitled to the 123 maximum exemption provided by this subsection regardless of the taxpayer's filing status or 124 the amount of the taxpayer's Missouri adjusted gross income. 125 6. For all tax years beginning on or before December 31, 2023, if a taxpayer's 126 adjusted gross income exceeds the adjusted gross income ceiling for such taxpayer's filing 127 status, as provided in subdivisions (1) and (2) of subsection 5 of this section, such taxpayer HB 2059 5
128 shall be entitled to an exemption, less any applicable reduction provided under subsection 7 129 of this section, equal to the greater of zero or the maximum exemption provided in subsection 130 5 of this section reduced by one dollar for every dollar such taxpayer's income exceeds the 131 ceiling for his or her filing status. 132 7. For purposes of calculating the subtraction provided in subsection 5 of this section, 133 such subtraction shall be decreased by an amount equal to any Social Security benefit 134 exemption provided under section 143.125. 135 8. For purposes of this section, any Social Security benefits otherwise included in 136 Missouri adjusted gross income shall be subtracted; but Social Security benefits shall not be 137 subtracted for purposes of other computations pursuant to this chapter, and are not to be 138 considered as retirement benefits for purposes of this section. 139 9. The provisions of subdivisions (1) and (2) of subsection 3 of this section shall 140 apply during all tax years in which the federal Internal Revenue Code provides exemption 141 levels for calculation of the taxability of Social Security benefits that are the same as the 142 levels in subdivisions (1) and (2) of subsection 3 of this section. If the exemption levels for 143 the calculation of the taxability of Social Security benefits are adjusted by applicable federal 144 law or regulation, the exemption levels in subdivisions (1) and (2) of subsection 3 of this 145 section shall be accordingly adjusted to the same exemption levels. 146 10. The portion of a taxpayer's lump sum distribution from an annuity or other 147 retirement plan not otherwise included in Missouri adjusted gross income as calculated 148 pursuant to this chapter but subject to taxation under Internal Revenue Code Section 402 shall 149 be taxed in an amount equal to ten percent of the taxpayer's federal liability on such 150 distribution for the same tax year. 151 11. For purposes of this section, retirement benefits received shall not include any 152 withdrawals from qualified retirement plans which are subsequently rolled over into another 153 retirement plan. 154 12. The exemptions provided for in this section shall not affect the calculation of the 155 income to be used to determine the property tax credit provided in sections 135.010 to 156 135.035. 157 13. The exemptions provided for in this section shall apply to any annuity, pension, or 158 retirement allowance as defined in subsection 1 of this section to the extent that such amounts 159 are included in the taxpayer's federal adjusted gross income and not otherwise deducted from 160 the taxpayer's federal adjusted gross income in the calculation of Missouri taxable income. 161 This subsection shall not apply to any individual who qualifies under federal guidelines to be 162 one hundred percent disabled. ✔
Statutes affected: