Missouri does tax pensions, but generous deductions mean many retirees pay little or no state tax on their retirement income. Public pensions are fully deductible up to the maximum Social Security benefit ($48,967 for 2026), military retirement pay is 100% exempt, and Social Security benefits are fully deductible for anyone 62 or older. Private pensions are the exception: Missouri caps that deduction at $6,000 and phases it out at fairly low income levels.
Public Pensions
If your pension comes from federal, state, or local government employment, Missouri lets you subtract those benefits from your state taxable income up to the maximum Social Security benefit amount for the tax year. For 2026, that cap is $48,967.1Missouri Department of Revenue. Pension FAQs The deduction applies only to the portion of your pension that is included in your federal adjusted gross income, which is where Missouri starts its own calculation.
The rules changed significantly for tax years beginning January 1, 2024. Before then, the public pension deduction phased out for taxpayers with Missouri adjusted gross income above $85,000 (single) or $100,000 (married filing combined). Senate Bill 190, signed in 2023, removed that income limit entirely, so the full public pension exemption is now available regardless of filing status or income.2Missouri Senate. Senate Bill 190
One catch: if you also claim the Social Security or Social Security disability deduction described below, your public pension exemption is reduced by that amount.1Missouri Department of Revenue. Pension FAQs This prevents stacking both deductions beyond the maximum Social Security benefit cap.
Not every government-related plan qualifies. Railroad retirement benefits, for instance, do not count as a public pension unless you are 100% disabled.1Missouri Department of Revenue. Pension FAQs If you are not sure how your plan is classified, ask your plan administrator.
Private Pensions
Pensions from private-sector employers get a much smaller break. Missouri allows a maximum deduction of $6,000 per taxpayer, and that deduction still carries income limits that were not lifted by SB 190. To claim the full $6,000, your Missouri adjusted gross income must fall at or below:3Missouri Department of Revenue. 2025 Missouri Income Tax Reference Guide
- $25,000 for single, head of household, or qualifying widow(er)
- $32,000 for married filing combined
- $16,000 for married filing separately
Above those thresholds the deduction phases out dollar for dollar. A single filer with $28,000 in Missouri adjusted gross income, for example, would see the $6,000 deduction cut by $3,000, leaving a $3,000 exemption. The taxable portion of Social Security benefits is not counted when testing whether you meet the income limits.3Missouri Department of Revenue. 2025 Missouri Income Tax Reference Guide
Anything above the exemption is taxed as ordinary income at Missouri’s graduated rates, which run from 2% to 4.7% for 2026.4Missouri Department of Revenue. 2026 Missouri Withholding Tax Formula
Military Retirement Pay
Missouri fully exempts military retirement pay from state income tax. The exemption covers 100% of benefits from active-duty service, reserve components, and the Missouri National Guard, with no income cap and no maximum dollar limit.5Missouri Revisor of Statutes. Revised Statutes of Missouri, RSMo Section 143.121 Veterans do not need to meet any income threshold to claim it.
Social Security Benefits
Social Security is not technically a pension, but for most retirees it belongs in the same conversation. Missouri fully exempts Social Security benefits for anyone age 62 or older, and Social Security disability benefits are fully exempt at any age. Like the public pension rules, the income caps that used to apply ($85,000 single, $100,000 married filing combined) were eliminated by SB 190 for tax years beginning on or after January 1, 2024.6Missouri Department of Revenue. Pension Tax Year 2024 FAQs
The exemption only reaches benefits that were included in your federal adjusted gross income under IRS rules. If your combined income was low enough that the federal government did not tax any of your benefits, there is nothing to subtract on your Missouri return. If the IRS taxed a portion, Missouri now lets you subtract 100% of that taxed amount.6Missouri Department of Revenue. Pension Tax Year 2024 FAQs
How Missouri Calculates the Tax
Missouri begins with your federal adjusted gross income, which already includes pension distributions, 401(k) withdrawals, traditional IRA payouts, and any taxable Social Security benefits. From there, the state applies the retirement deductions described above to arrive at Missouri taxable income. The remaining amount is taxed at rates from 2% to 4.7% for 2026, after the top rate dropped from 4.8% in 2025 under a revenue trigger written into state law.7Missouri Department of Revenue. Individual Income Tax Year Changes Because of the deductions, many retirees end up with an effective rate well below the top bracket, and some owe nothing at all.
How to Claim the Deductions
You will need federal Form 1099-R, which reports distributions from pensions, annuities, and retirement plans, and Form SSA-1099 if you receive Social Security. Your completed federal return supplies the adjusted gross income figure Missouri uses as its starting point.
Check Box 7 of the 1099-R for the distribution code. Code 7 is a normal retirement distribution, Code 2 is an early distribution with an exception, and Code 4 is a payment to a beneficiary after the account holder’s death.8Internal Revenue Service. Instructions for Forms 1099-R and 5498 These codes help determine which Missouri deduction applies.
Calculate the deductions on Form MO-A (Individual Income Tax Adjustments), entering the source of each pension and the taxable amount. The resulting deduction transfers to Form MO-1040, reducing your Missouri taxable income.9Missouri Department of Revenue. Forms and Manuals You can file electronically through the Missouri Department of Revenue’s online portal or mail a paper return, and you should keep copies of your return and supporting documents for at least three years after filing.