Are Social Security Benefits Taxable in Missouri?

Understanding how Social Security benefits are treated for tax purposes is important for financial planning. Both the federal government and individual states have rules that determine if, and how much, of a person’s Social Security income is subject to taxation.

Federal Taxation of Social Security Benefits

The federal government may tax a portion of Social Security benefits based on a concept known as “provisional income.” Provisional income is calculated by taking your adjusted gross income (AGI), adding any tax-exempt interest income, and then adding one-half of your total Social Security benefits. This figure helps determine whether any of your benefits will be subject to federal income tax.

For single filers, if provisional income is below $25,000, none of the Social Security benefits are federally taxed. If provisional income is between $25,000 and $34,000, up to 50% of the benefits may be taxable. Should provisional income exceed $34,000, up to 85% of Social Security benefits could be subject to federal taxation.

For those married filing jointly, the thresholds differ. If their provisional income is less than $32,000, their Social Security benefits are not federally taxed. Provisional income between $32,000 and $44,000 can result in up to 50% of benefits being taxable. If the provisional income surpasses $44,000, up to 85% of the Social Security benefits may be included in federal taxable income.

Missouri’s Taxation of Social Security Benefits

Missouri has made significant changes to its approach to taxing Social Security benefits. Historically, Missouri taxed Social Security benefits for certain income levels, similar to the federal system but with its own set of income thresholds.

However, a new law, Senate Bill 190, passed in 2023, has fundamentally altered this. As of January 1, 2024, Social Security benefits are now fully exempt from state income tax in Missouri. This change applies regardless of a taxpayer’s income level, providing a complete exemption for all Social Security income received by eligible Missouri residents. While federal taxation may still apply based on provisional income, Missouri has eliminated its state-level tax on these benefits.

Missouri Income Thresholds for Exemption

For tax years beginning on or after January 1, 2024, Missouri has eliminated all income limitations for the Social Security benefit deduction. This means that for eligible taxpayers, 100% of their Social Security benefits are no longer taxed by the state of Missouri, irrespective of their Missouri adjusted gross income (AGI). This comprehensive exemption applies to individuals aged 62 or older and those receiving Social Security disability benefits, to the extent these benefits are included in federal AGI.

Prior to this change, for tax years before 2024, Missouri did have specific AGI thresholds that determined eligibility for a full or partial Social Security exemption. For instance, single filers, heads of household, qualifying widow(ers), or married individuals filing separately could claim a full deduction if their Missouri AGI was $85,000 or less. Married couples filing combined returns had a higher threshold of $100,000 for a full exemption.

The passage of Senate Bill 190 in 2023 removed these previous income-based restrictions for Social Security benefits. Taxpayers no longer need to calculate their Missouri AGI against these former thresholds to determine if their Social Security benefits are exempt from state tax.