What's New?
Individual Income Tax Changes
The following changes are all effective January 1, 2008, and will be reflected on the 2008 Missouri income tax returns.
- New Public Pension Exemption
- New Social Security and Social Security Disability Deduction
- New Requirements for Contributions to a Qualified 529 Plan
- New Property Tax Credit Income Limits
- New Property Tax Credit Amount
New Public Pension Exemption
Married couples with Missouri adjusted gross income less than $100,000 and single individuals with Missouri adjusted gross income less than $85,000, may deduct the greater of $6,000 or 35 percent of their public retirement benefits, to the extent the amounts are included in their federal adjusted gross income. The deductible percentage of their public retirement benefits will increase until 2012. A breakdown of the yearly percentage is as follows:
| Year | Limit |
|---|---|
| 2007 | 20% |
| 2008 | 35% |
| 2009 | 50% |
| 2010 | 65% |
| 2011 | 80% |
| 2012 and forward | 100% |
The total public pension exemption is limited to the maximum social security benefit of each spouse.
Married couples with Missouri adjusted gross income greater than $100,000 and single individuals with Missouri adjusted gross income greater than $85,000, may qualify for a partial exemption. See the public pension exemption eligibility chart
or complete the public pension calculation located on the MO-A, to determine if you are eligible.
New Social Security and Social Security Disability Deduction
Married couples with Missouri adjusted gross income less than $100,000 and single individuals with Missouri adjusted gross income less than $85,000, may deduct up to 35% of taxable social security and social security disability benefits. The deductible percentage of their social security and social security disability benefits will increase until 2012. A breakdown of the yearly percentage is as follows:
| Year | Limit |
|---|---|
| 2007 | 20% |
| 2008 | 35% |
| 2009 | 50% |
| 2010 | 65% |
| 2011 | 80% |
| 2012 and forward | 100% |
Individuals must be 62 to qualify for a social security deduction.
Married couples with Missouri adjusted gross income greater than $100,000 and single individuals with Missouri adjusted gross income greater than $85,000, may qualify for a partial deduction. See the social security/social security disability deduction eligibility chart or complete the social security/social security disability calculation located on the MO-A, to determine if you are eligible.
New Requirements for Contributions to a Qualified 529 Plan.
Individuals may subtract up to $8,000 ($16,000 if married filing a combined Missouri income tax return) from their income if they contribute to any qualified 529 plan. Previously, the subtraction was limited to contributions made to Missouri sponsored 529 plans. If married and filing a combined return, the subtraction may be split between the spouses in any ratio, as long as the total subtraction does not exceed $16,000.
New Property Tax Credit Income Limits
Single individuals who own their home for the entire year may qualify for the property tax credit if they have income of $30,000 or less. Single individuals who rent or own their home for only part of the year may qualify for the property tax credit if they have income of $27,500 or less.
Married individuals who file a combined return and own their home for the entire year may qualify for the property tax credit if they have income of $34,000 or less. Married individuals who file a combined return and rent or own their home for only part of the year may qualify for the property tax credit if they have income of $29,500 or less.
New Property Tax Credit Amount
Individuals who pay property tax are eligible to claim up to a $1,100 property tax credit. If you pay both property tax and rent, you may combine the amounts paid and claim up to a $1,100 property tax credit. If you only pay rent, you are limited to a $750 property tax credit.