The public pension exemption was updated for the 2024 tax year removing the Missouri (MO) adjusted gross income limitation. According to the Missouri Department of Revenue, this means that fewer public pension benefits will be subject to tax.
What exactly does this mean for our members?
Prior to 2024
The public pension exemption applied as follows:
Married couples living in Missouri with a MO adjusted gross income of less than $100,000 and single individuals living in Missouri with a MO adjusted gross income less than $85,000 were able to deduct 100% of their public retirement benefits, up to the maximum amount of social security benefit. Those whose MO adjusted gross income was over the previously mentioned thresholds were still able to receive a prorated exemption based on their income.
Effective January 1, 2024
The MO adjusted gross income limit of the public pension exemption has been removed. Therefore, anyone who receives a public pension, regardless of their total MO adjusted gross income, can receive the public pension exemption up to the social security maximum.
Does this mean your entire public pension will be exempt from state tax? No. The social security maximum limit still exists.
If your public pension in 2024 is $46,381 or less annually, then your entire pension would be state-tax exempt in 2024.
