Missouri does not tax Social Security benefits

Missouri is one of the states that does not impose a state income tax on Social Security retirement, survivor, or disability benefits. If you receive Social Security payments and live in Missouri, you will not owe state tax on that income. This applies whether you are retired, disabled, or receiving benefits as a survivor.

However, you may still owe federal income tax on your Social Security benefits depending on your total income for the year. The federal government uses a formula based on your "combined income"—which includes your adjusted gross income, nontaxable interest, and half of your Social Security benefits—to determine whether any of your benefits are taxable at the federal level.

The key distinction is that Missouri's state tax system excludes Social Security entirely, but your federal tax obligation is separate and depends on your other sources of income.

Key Takeaways

  • Missouri does not tax Social Security benefits at the state level, regardless of how much you receive or your other income.
  • You may still owe federal income tax on Social Security if your combined income exceeds certain thresholds set by the IRS.
  • Combined income includes your adjusted gross income, nontaxable interest, and half of your Social Security benefits.
  • If you work while receiving Social Security before full retirement age, Missouri has no state tax on those benefits, but federal rules about earnings limits still explore.

How federal taxation of Social Security works

The IRS taxes Social Security benefits based on your combined income, not on the amount of benefits you receive alone. Combined income is calculated as your adjusted gross income plus nontaxable interest plus half of your Social Security benefits. The IRS then applies two tiers of thresholds to determine how much of your benefit is taxable.

For single filers in 2024, if your combined income is between $25,000 and $34,000, you may owe federal tax on up to 50 percent of your benefits. If your combined income exceeds $34,000, you may owe tax on up to 85 percent of your benefits. For married couples filing jointly, the thresholds are $32,000 and $44,000 respectively. These thresholds do not change with inflation, so more people become subject to taxation each year.

If your combined income falls below the first threshold for your filing status, none of your Social Security benefits are taxable at the federal level. You would still file a federal return if required by other income, but the Social Security portion would not trigger federal tax.

What counts as income when calculating federal tax on benefits

Combined income includes more than just wages and salary. It includes interest income, dividend income, capital gains, rental income, and income from self-employment. It also includes distributions from retirement accounts like IRAs and 401(k)s, though not Roth IRA distributions if you have not owned the account for five years.

Nontaxable interest—such as interest from municipal bonds—counts toward combined income for Social Security taxation purposes, even though it is not taxable for regular income tax purposes. This is one of the reasons your combined income can be higher than your taxable income.

Pension income, annuity payments, and any other retirement income also count. If you are still working, your wages count as well. The only major income sources that do not count toward combined income are Supplemental Security Income (SSI) and certain veterans' benefits.

Working while receiving Social Security in Missouri

If you are under your full retirement age and working, Social Security has an earnings limit that may reduce your benefits. In 2024, if you earn more than $23,400 in a year, Social Security will withhold $1 for every $2 you earn above that limit. The month you reach full retirement age, the limit increases to $62,160, and Social Security withholds $1 for every $3 earned above that amount until the month you reach full retirement age.

Missouri does not tax any of your Social Security benefits, even if your earnings cause a reduction in the amount you receive. However, your wages themselves are subject to Missouri income tax if you are working. The federal earnings limit is a Social Security rule, not a tax rule, so it operates independently of both state and federal taxation.

Once you reach your full retirement age, there is no earnings limit, and you can work and receive your full Social Security benefit without any reduction. Missouri still will not tax your Social Security income at that point.

Other Missouri tax considerations for retirees

While Missouri does not tax Social Security, it does tax other forms of retirement income. Distributions from traditional IRAs and 401(k)s are taxable as income in Missouri. Pension income from a private employer or government job is also taxable in Missouri, though Missouri does offer a pension exclusion for certain government pensions.

Interest and dividend income are taxable in Missouri. If you have rental property or other business income, that is taxable as well. The Social Security exemption is specific to Social Security benefits and does not extend to other retirement income sources.

Missouri's state income tax rate is graduated, ranging from 1.5 percent to 5.75 percent depending on your income bracket. If you have significant income from sources other than Social Security, you will owe state tax on that income based on your total income and filing status.

Filing your federal return when you receive Social Security

You must file a federal income tax return if your gross income meets the IRS threshold for your age and filing status. For 2024, a single person age 65 or older must file if their gross income is $15,000 or more. A married couple filing jointly where at least one spouse is 65 or older must file if their combined gross income is $27,700 or more.

When calculating whether you must file, include all income sources—wages, interest, dividends, pensions, and half of your Social Security benefits. Even if none of your Social Security is taxable, you may still be required to file if your other income exceeds the threshold.

You will report your Social Security income on IRS Form 1040 using the amount shown in box 5a of your Social Security Statement (Form SSA-1099), which you receive each January. The IRS worksheet in the instructions will help you determine how much, if any, of your benefit is taxable.

Frequently Asked Questions

Do I have to pay Missouri state tax on my Social Security?

No. Missouri does not tax Social Security benefits at the state level. You will not owe Missouri income tax on your Social Security income, regardless of how much you receive or what other income you have.

Will I owe federal tax on my Social Security if I live in Missouri?

That depends on your combined income. If your combined income—adjusted gross income plus nontaxable interest plus half your Social Security—is below $25,000 (single) or $32,000 (married filing jointly), none of your benefits are taxable federally. Above those thresholds, up to 85 percent of your benefits may be taxable.

What if I work part-time and receive Social Security?

Your wages are subject to Missouri income tax. Your Social Security benefits are not. If you are under full retirement age, Social Security may reduce your benefits if you earn above the annual limit, but that reduction is not a tax—it is a benefit adjustment. Once you reach full retirement age, you can earn any amount without affecting your benefits.

Are my pension and IRA withdrawals taxed in Missouri?

Yes. Pensions and traditional IRA distributions are taxable income in Missouri. Social Security is the exception, not the rule. Other retirement income sources are subject to Missouri's graduated income tax.

How do I report Social Security on my federal return?

Report the amount from box 5a of your Form SSA-1099 on your federal return. Use the IRS worksheet in the Form 1040 instructions to calculate how much, if any, is taxable. You may owe federal tax even if Missouri does not tax your benefits.