New Missouri Public Pension Exemption

Beginning in tax year 2007, 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 20% of their public retirement benefits on their Missouri income taxes, 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:

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.
Visit www.dor.mo.gov for more information regarding eligibility. Or you may contact the Missouri Department of Revenue at (573) 751-3505, email income@dor.mo.gov or consult a tax professional for more information.

The IRS does not allow the withholding of federal taxes in a specified dollar amount. You may, however, elect to withhold an amount based on the number of allowances you choose and federal tax tables, with an additional dollar amount withheld.

Example:
Tax filing status: married
Number of exemptions elected: 0
This results in a withholding amount of $450.

If the desired withholding amount is $500, the member in this example should select a tax status of married, with zero exemptions, and an additional monthly withholding amount of $50.

Members who establish a new withholding amount or change their withholding amount must follow this rule. Those members with previously-designated specified federal tax withholding amounts will continue to have that specified amount withheld until a change is requested.

Please contact your tax advisor or visit www.irs.gov for more information.