Does Missouri Tax Social Security Benefits?

As of tax year 2024, Missouri no longer taxes Social Security benefits. While the federal government may still tax a portion of Social Security benefits depending on an individual’s income, Missouri has enacted legislation that exempts these benefits entirely from state income tax for all eligible residents. This means their Social Security income will not be subject to state-level taxation. The taxability of these benefits at the state level is not a simple yes or no answer for all periods prior to 2024, but for current and future tax years, the answer is clear.

Missouri’s Approach to Social Security Taxation

Missouri’s approach to taxing Social Security benefits changed significantly for tax years beginning January 1, 2024. Through Senate Bill 190, the state eliminated previous income limitations that determined whether Social Security benefits were subject to state income tax. This provides a full exemption for all Social Security benefits from Missouri state income tax, regardless of income level.

This state-level exemption for Social Security benefits differs from federal tax rules. At the federal level, a portion of Social Security benefits may still be subject to income tax based on what is known as “provisional income.” Provisional income generally includes half of your Social Security benefits, along with your adjusted gross income and any tax-exempt interest. However, Missouri’s state tax law now provides a complete exclusion for these benefits, distinguishing it from the federal treatment.

Income Thresholds for Exemption

For tax years beginning January 1, 2024, there are no state income thresholds for Social Security benefits in Missouri; all benefits are fully exempt. This change means that recipients no longer need to assess their adjusted gross income (AGI) against specific limits to determine if their benefits are taxable at the state level.

Prior to this legislative change, for tax years before 2024, Missouri did impose income limitations for the Social Security exemption. For instance, in previous years, single filers with a Missouri Adjusted Gross Income (AGI) exceeding $85,000, or married couples filing jointly with an AGI over $100,000, might have had a portion of their Social Security benefits subject to state tax. However, these thresholds are now obsolete for Social Security benefits as of the 2024 tax year and beyond, due to the full exemption.

Calculating Taxable Social Security Benefits

Since Social Security benefits are fully exempt from Missouri state income tax as of January 1, 2024, there is no state-level calculation required. This means that individuals receiving Social Security benefits in Missouri will not owe state income tax on those benefits, regardless of their overall income.

It is important to remember that while Missouri does not tax Social Security benefits, federal tax rules still apply. Depending on your “provisional income,” a portion of your Social Security benefits may still be subject to federal income tax. For example, individuals with provisional income between $25,001 and $34,000 (single filers) or $32,001 and $44,000 (married filing jointly) may have up to 50% of their benefits federally taxed. If provisional income exceeds these higher thresholds, up to 85% of benefits could be federally taxable.