The bill proposes the repeal of section 143.175 of the Revised Statutes of Missouri and enacts a new section that establishes an income tax deduction for certain National Guard duties. Starting from tax years beginning on or after January 1, 2020, individuals can deduct a percentage of their income received for performing inactive duty for training (IDT), annual training status (AT), and, beginning in 2025, bonuses from the National Guard or reserve components of the Armed Forces for various reasons. Additionally, for tax years starting on or after January 1, 2027, income earned from state-funded military orders, known as state active duty (SAD) or state emergency duty (SED), will also be eligible for this deduction. The deduction will be phased in over several years, starting with 20% for the 2020 tax year and increasing to 100% for tax years beginning on or after January 1, 2024. The bill specifies that if a taxpayer files a combined return with a spouse, they can also deduct a percentage of military income received while performing National Guard or reserve military duty. However, the deduction will not apply to compensation received while engaging in civilian federal service, including civil service positions that require military affiliation.

Statutes affected:
Introduced (6286H.01): 143.175