Note on source material
- The provided document included multiple different bills from several states (Arkansas, Illinois, Mississippi, Missouri) that share the number HB 1762. The bill title and subject you provided (“Modifies provisions relating to income tax deductions for private pensions”) corresponds to the Missouri HB 1762 (RSMo §143.124) included in the materials. The summary below focuses on that Missouri retirement‑income / tax deduction provision.
Summary — Missouri HB 1762 (amending RSMo §143.124)
Purpose
- Increase the state income‑tax subtraction (deduction) for privately funded retirement income (private pensions/retirement allowances) for Missouri taxpayers and adjust the income eligibility thresholds beginning in tax year 2027.
Key provisions
- Replaces and rewords section 143.124, RSMo, governing subtractions from Missouri adjusted gross income for retirement/annuity income.
- Private‑source deduction amount:
- Retains an historic maximum subtraction of $6,000 for retirement allowances from privately funded sources for tax years beginning on or after January 1, 2002, through December 31, 2026.
- Raises the maximum subtraction for retirement allowances from privately funded sources to $12,000 for tax years beginning on or after January 1, 2027.
- Eligibility (income ceilings) to receive the maximum exemption:
- For tax years beginning on or before December 31, 2026:
- Single/head of household/qualifying widow(er): Missouri AGI < $25,000
- Married filing combined: combined Missouri AGI < $32,000
- Married filing separately: Missouri AGI < $16,000
- For tax years beginning on or after January 1, 2027:
- Single/head/widow(er): Missouri AGI < $50,000
- Married filing combined: combined Missouri AGI < $64,000
- Married filing separately: Missouri AGI < $32,600
- Phase‑out: If a taxpayer’s Missouri adjusted gross income exceeds the applicable ceiling, the exemption is reduced dollar‑for‑dollar — one dollar of exemption lost for each dollar by which income exceeds the ceiling (down to zero).
- Definitions: The section defines “annuity, pension, retirement benefit, or retirement allowance” to include benefits from federal, state or local government plans and (for tax years beginning on or after January 1, 1998) privately funded plans such as 401(k) plans, deferred compensation, Keogh plans, defined pension annuities, and IRAs (excluding Roth IRAs).
- Other existing provisions in §143.124 (e.g., treatment of non‑privately funded retirement income, Social Security‑related calculations) are retained in structure; the primary change is the larger subtraction for privately funded retirement allowances beginning in 2027.
Who is affected
- Missouri resident taxpayers who receive retirement income from privately funded sources (private pensions, 401(k), IRAs (non‑Roth), Keogh, etc.). The change most benefits retirees with adjusted gross incomes below the new thresholds, and particularly those receiving moderate private retirement income who will be eligible for a higher subtraction beginning tax year 2027.
Timing / procedural status (from provided actions)
- Introduced January 2025; progressed through committee and floor actions in spring 2025.
- Legislative history in the materials indicates the bill was passed and enrolled and noted as Act 1009 (notification dated 2025‑04‑22). (Confirm current codification and effective dates with the official State Register or Secretary of State if you need final, binding status.)
Potential fiscal and policy impacts
- State revenue: Increasing the allowable subtraction from $6,000 to $12,000 (starting in 2027) will reduce Missouri taxable income for eligible retirees and therefore reduce state income tax revenue; the materials do not include an explicit fiscal note or revenue estimate.
- Equity/targeting: The measure targets privately funded retirement income and phases benefits by income, expanding the benefit for low‑ and moderate‑income retirees.
- Complexity: Tax preparers must apply the new higher limit and the adjusted income ceilings beginning in tax year 2027.
Sponsors and related legislation
- Sponsors noted in the materials: Rep(s). Hall, Puryear, Gramlich, J. Richardson, Rose, Crawford; Sen. J. Petty (primary). Companion bill: SB 552 (listed as companion).
If you want
- I can produce: (1) a short explainer for retirees showing example tax calculations under current law vs. the bill; (2) an estimate of revenue impact (requires assumptions or a state fiscal note); or (3) a plain‑language Q&A for taxpayers. Which would be most useful?
