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SECOND REGULAR SESSION
HOUSE BILL NO. 2205
103RD GENERAL ASSEMBL Y
INTRODUCED BY REPRESENT A TIVE MA YHEW .
3924H.01I JOSEPH ENGLER, Chief Clerk
AN ACT
T o repeal section 143.124, RSMo, and to enact in lieu thereof one new section relating to
retirement income 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Section A. Section 143.124, RSMo, is repealed and one new section enacted in lieu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
EXPLANA TION — 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.
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, ] (1) 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 on or before
48 December 1, 2026 . For all tax years beginning on or before December 31, 2026, a
49 taxpayer shall be entitled to the maximum exemption provided by this [ subsection ]
50 subdivision :
51 [ (1) ] (a) If the taxpayer's filing status is single, head of household or qualifying
52 widow(er) and the taxpayer's Missouri adjusted gross income is less than twenty-five
53 thousand dollars; or
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54 [ (2) ] (b) If the taxpayer's filing status is married filing combined and their combined
55 Missouri adjusted gross income is less than thirty-two thousand dollars; or
56 [ (3) ] (c) If the taxpayer's filing status is married filing separately and the taxpayer's
57 Missouri adjusted gross income is less than sixteen thousand dollars.
58 (2) For all tax years beginning on or after January 1, 2027, ther e shall be
59 subtracted fr om Missouri adjusted gross income, determined under section 143.121, one
60 hundr ed per cent of any reti rem ent allowance received by each taxpayer fr om any
61 privately funded sour ces. A taxpayer shall be entitled to the exemption pro vided by this
62 subdivision r egardless of the taxpayer's filing status or the amount of the taxpayer's
63 Missouri adjusted gr oss income.
64 4. For all tax years beginning on or before December 31, 2026, if a taxpayer's
65 adjusted gross income exceeds the adjusted gross income ceiling for such taxpayer's filing
66 status, as provided in [ subdivisions (1), (2) and (3) ] paragraphs (a), (b), and (c) of
67 subdivision (1) of subsection 3 of this section, such taxpayer shall be entitled to an exemption
68 equal to the greater of zero or the maximum exemption provided in subsection 3 of this
69 section reduced by one dollar for every dollar such taxpayer's income exceeds the ceiling for
70 his or her filing status.
71 5. For purposes of this subsection, the term "maximum Social Security benefit
72 available" shall mean thirty-two thousand five hundred dollars for the tax year beginning on
73 or after January 1, 2007, and for each subsequent tax year such amount shall be increased by
74 the percentage increase in the Consumer Price Index for All Urban Consumers, or its
75 successor index, as such index is defined and of ficially reported by the United States
76 Department of Labor , or its successor agency . [ For the tax year beginning on or after January
77 1, 2007, but ending on or before December 31, 2007, there shall be subtracted from Missouri
78 adjusted gross income, determined pursuant to section 143.121 , a maximum of an amount
79 equal to the greater of: six thousand dollars in retirement benefits received from sources other
80 than privately funded sources, to the extent such benefits are included in the taxpayer's federal
81 adjusted gross income; or twenty percent of the retirement benefits received from sources
82 other than privately funded sources in the tax year , but not to exceed the maximum Social
83 Security benefit available for such tax year . For the tax year beginning on or after January 1,
84 2008, but ending on or before December 31, 2008, there shall be subtracted from Missouri
85 adjusted gross income, determined pursuant to section 143.121 , a maximum of an amount
86 equal to the greater of: six thousand dollars in retirement benefits received from sources other
87 than privately funded sources, to the extent such benefits are included in the taxpayer's federal
88 adjusted gross income; or thirty-five percent of the retirement benefits received from sources
89 other than privately funded sources in the tax year , but not to exceed the maximum Social
90 Security benefit available for such tax year . For the tax year beginning on or after January 1,
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91 2009, but ending on or before December 31, 2009, there shall be subtracted from Missouri
92 adjusted gross income, determined pursuant to section 143.121 , a maximum of an amount
93 equal to the greater of: six thousand dollars in retirement benefits received from sources other
94 than privately funded sources, to the extent such benefits are included in the taxpayer's federal
95 adjusted gross income; or fifty percent of the retirement benefits received from sources other
96 than privately funded sources in the tax year , but not to exceed the maximum Social Security
97 benefit available for such tax year . For the tax year beginning on or after January 1, 2010, but
98 ending on or before December 31, 2010, there shall be subtracted from Missouri adjusted
99 gross income, determined pursuant to section 143.121 , a maximum of an amount equal to the
100 greater of: six thousand dollars in retirement benefits received from sources other than
101 privately funded sources, to the extent such benefits are included in the taxpayer's federal
102 adjusted gross income; or sixty-five percent of the retirement benefits received from sources
103 other than privately funded sources in the tax year , but not to exceed the maximum Social
104 Security benefit available for such tax year . For the tax year beginning on or after January 1,
105 201 1, but ending on or before December 31, 201 1, there shall be subtracted from Missouri
106 adjusted gross income, determined pursuant to section 143.121 , a maximum of an amount
107 equal to the greater of: six thousand dollars in retirement benefits received from sources other
108 than privately funded sources, to the extent such benefits are included in the taxpayer's federal
109 adjusted gross income; or eighty percent of the retirement benefits received from sources
110 other than privately funded sources in the tax year , but not to exceed the maximum Social
111 Security benefit available for such tax year . ] For all tax years beginning on or after January 1,
112 2012, but beginning on or before December 31, 2026, there shall be subtracted from
113 Missouri adjusted gross income, determined pursuant to section 143.121, a maximum of an
114 amount equal to one hundred percent of the retirement benefits received from sources other
115 than privately funded sources in the tax year , but not to exceed the maximum Social Security
116 benefit available for such tax year . For all tax years beginning on or before December 31,
117 2023, a taxpayer shall be entitled to the maximum exemption provided by this subsection:
118 (1) If the taxpayer's filing status is married filing combined, and their combined
119 Missouri adjusted gross income is equal to or less than one hundred thousand dollars; or
120 (2) If the taxpayer's filing status is single, head of household, qualifying widow(er),
121 or married filing separately , and the taxpayer's Missouri adjusted gross income is equal to or
122 less than eighty-five thousand dollars.
123
124 For all tax years beginning on or after January 1, 2024, a taxpayer shall be entitled to the
125 maximum exemption provided by this subsection regardless of the taxpayer's filing status or
126 the amount of the taxpayer's Missouri adjusted gross income. For all tax years beginning on
127 after January 1, 2027, ther e shall be subtracted fro m Missouri adjusted gr oss income,
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128 determined under section 143.121, one hundred per cent of the ret irem ent benefits
129 r eceived fr om sourc es other than privately funded sour ces in the tax year .
130 6. For all tax years beginning on or before December 31, 2023, if a taxpayer's
131 adjusted gross income exceeds the adjusted gross income ceiling for such taxpayer's filing
132 status, as provided in subdivisions (1) and (2) of subsection 5 of this section, such taxpayer
133 shall be entitled to an exemption, less any applicable reduction provided under subsection 7
134 of this section, equal to the greater of zero or the maximum exemption provided in subsection
135 5 of this section reduced by one dollar for every dollar such taxpayer's income exceeds the
136 ceiling for his or her filing status.
137 7. For purposes of calculating the subtraction provided in subsection 5 of this section,
138 such subtraction shall be decreased by an amount equal to any Social Security benefit
139 exemption provided under section 143.125.
140 8. For purposes of this section, any Social Security benefits otherwise included in
141 Missouri adjusted gross income shall be subtracted; but Social Security benefits shall not be
142 subtracted for purposes of other computations pursuant to this chapter , and are not to be
143 considered as retirement benefits for purposes of this section.
144 9. The provisions of subdivisions (1) and (2) of subsection 3 of this section shall
145 apply during all tax years in which the federal Internal Revenue Code provides exemption
146 levels for calculation of the taxability of Social Security benefits that are the same as the
147 levels in subdivisions (1) and (2) of subsection 3 of this section. If the exemption levels for
148 the calculation of the taxability of Social Security benefits are adjusted by applicable federal
149 law or regulation, the exemption levels in subdivisions (1) and (2) of subsection 3 of this
150 section shall be accordingly adjusted to the same exemption levels.
151 10. The portion of a taxpayer's lump sum distribution from an annuity or other
152 retirement plan not otherwise included in Missouri adjusted gross income as calculated
153 pursuant to this chapter but subject to taxation under Internal Revenue Code Section 402 shall
154 be taxed in an amount equal to ten percent of the taxpayer's federal liability on such
155 distribution for the same tax year .
156 1 1. For purposes of this section, retirement benefits received shall not include any
157 withdrawals from qualified retirement plans which are subsequently rolled over into another
158 retirement plan.
159 12. The exemptions provided for in this section shall not af fect the calculation of the
160 income to be used to determine the property tax credit provided in sections 135.010 to
161 135.035.
162 13. The exemptions provided for in this section shall apply to any annuity , pension, or
163 retirement allowance as defined in subsection 1 of this section to the extent that such amounts
164 are included in the taxpayer's federal adjusted gross income and not otherwise deducted from
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165 the taxpayer's federal adjusted gross income in the calculation of Missouri taxable income.
166 This subsection shall not apply to any individual who qualifies under federal guidelines to be
167 one hundred percent disabled.
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