Missouri does not tax military retirement pay. Under Missouri Revised Statutes Section 143.121, the state subtracts 100% of qualifying military retirement benefits from your Missouri adjusted gross income, which zeroes out state income tax on that money.1Missouri Revisor of Statutes. Missouri Revised Statutes Section 143.121 There is no income cap, no age requirement, and no phase-out. At Missouri’s top individual rate of 4.70%, a retiree collecting $30,000 a year in military retirement pay keeps roughly $1,410 that would otherwise go to the state.2Missouri Department of Revenue. 2025 Individual Income Tax Year Changes
The subtraction is not automatic. You have to claim it on the right line of the right form, and a few related payments that look like retirement pay do not qualify. Here is what counts, what doesn’t, and how to file.
What Qualifies as Military Retirement Pay
The statute covers retirement benefits received “as a result of the taxpayer’s service in the Armed Forces of the United States, including reserve components and the National Guard of this state.”1Missouri Revisor of Statutes. Missouri Revised Statutes Section 143.121 That language reaches all branches — Army, Navy, Air Force, Marine Corps, Space Force, and Coast Guard — along with retired members of the National Guard and reserve components who draw retirement pay.
Concurrent Retirement and Disability Pay (CRDP) qualifies too. CRDP is taxable at the federal level and appears on your 1099-R as part of your retirement distribution, so it flows into your federal adjusted gross income and is eligible for Missouri’s full subtraction.3Defense Finance and Accounting Service. CRDP CRSC FAQs
What the Exemption Does Not Cover
A few payments veterans and their families receive look like retirement pay but sit outside the Missouri subtraction. Getting these wrong is one of the easiest filing mistakes.
Survivor Benefit Plan Annuities
Survivor Benefit Plan (SBP) payments are not covered. The statute limits the deduction to retirement benefits received as a result of the taxpayer’s own service, and a surviving spouse or child did not personally serve. A fiscal analysis of SB 1063 in the 2026 session confirmed that SBP annuities remain taxable at the state level under current law and would require a statutory change to become exempt.4Missouri Senate. Fiscal Note SB 1063 SBP annuitants should include those payments in Missouri taxable income unless and until the law changes.
VA Disability Compensation and CRSC
VA disability compensation is tax-free at the federal level and never enters your federal adjusted gross income.5Internal Revenue Service. Publication 525 (2025), Taxable and Nontaxable Income Because Missouri starts its calculation from federal AGI, there is nothing to subtract. The same holds for Combat-Related Special Compensation (CRSC), which DFAS pays separately and treats as non-taxable.3Defense Finance and Accounting Service. CRDP CRSC FAQs Neither requires any action on your Missouri return.
If the VA rates you for a service-connected disability after you have already retired, your retirement pay for the retroactive period is excluded from federal income up to the amount of VA disability you would have received.5Internal Revenue Service. Publication 525 (2025), Taxable and Nontaxable Income That exclusion happens on the federal side. The Missouri subtraction then applies to whatever taxable portion remains on your corrected 1099-R.
How to Claim the Deduction
You need two documents in addition to your usual Missouri return: your 1099-R and Form MO-A.
Your 1099-R reports the total distribution and the taxable portion of your military retirement pay. Retirees can pull the form from myPay or receive a paper copy from DFAS each year.6Defense Finance and Accounting Service. Getting Your 1099-R The taxable amount is the figure you use for the Missouri subtraction.
Form MO-A (Individual Income Tax Adjustments) is where the deduction lives. For the 2025 tax year, military retirement benefits go on Line 10 in Part 1, under “Subtractions.”7Missouri Department of Revenue. Form MO-A – 2025 Individual Income Tax Adjustments Enter the taxable amount from the 1099-R on that line. The total from Form MO-A then transfers to your Form MO-1040. Paper filers attach the completed MO-A; electronic filers should confirm their software includes the adjustment form in the transmission.
Active-duty members and retirees with adjusted gross income of $89,000 or less can use IRS Free File at no cost, and several Free File partners extend free state filing to military users.8Internal Revenue Service. Use IRS Free File to Conveniently File Your Return at No Cost
Keep Documentation on Hand
The Missouri Department of Revenue can verify the deduction by cross-referencing your state return against federal records, which means the taxable amount on your 1099-R needs to match what you put on Line 10 of Form MO-A. Keep copies of the 1099-R, your DD-214 or retirement orders, and any DFAS correspondence about changes to your retirement pay. A mismatch is the fastest way to trigger a follow-up inquiry, and having the documents handy usually resolves it in one exchange.
If You Moved Into or Out of Missouri
A move during the tax year makes you a part-year resident. Missouri source income for retirees includes pensions and annuities received while you were living in the state. You can calculate your Missouri tax using either Form MO-NRI (Missouri Income Percentage) or Form MO-CR (Credit for Income Taxes Paid to Other States), whichever gives the lower result.9Missouri Department of Revenue. Form MO-NRI – 2025 Missouri Income Percentage
The 100% subtraction still applies, but only to the portion of retirement pay received while you were domiciled in Missouri. If you lived in the state for six months and elsewhere for six months, only the six months of retirement pay received as a Missouri resident goes on the Missouri return, and the full exemption applies to that amount. Accurate allocation on the right form is what makes the deduction stick.
Deadlines and Combat Zone Extensions
Missouri 2025 individual returns are due April 15, 2026.10Missouri Department of Revenue. Department of Revenue Now Accepting 2025 Tax Returns Missouri generally tracks the federal deadline, so a federal extension typically moves the state deadline with it.
Members deployed to a presidentially designated combat zone get a longer timeline. The IRS extends filing and payment deadlines for the full duration of combat zone service plus 180 days, with additional days added for whatever time remained before April 15 when the member entered the zone. No interest or penalties accrue during the extension.11Internal Revenue Service. Extension of Deadlines – Combat Zone Service Missouri recognizes these federal extensions, so the state deadline moves along with the federal one.
Missouri also offers a separate subtraction, on top of the retirement exemption, for income earned during combat zone service that is included in federal AGI.1Missouri Revisor of Statutes. Missouri Revised Statutes Section 143.121 That one is for active-duty pay, not retirement pay, but it is worth knowing if you are still serving or your spouse is on active duty while you file jointly.