Missouri PSRS (Public School Retirement System) Pensions Shouldn't Be Getting Taxed

[BoCoMoBM]

I am a retired Missouri teacher whose main source of income is my PSRS retirement. In the past, it wasn't taxed in Missouri as long as you met certain income requirements. As of 2024, it should be untaxed no matter your income. Mine is still showing up as taxable income when using TurboTax for Federal and State returns. Is there a way to manually change this, or should I wait for an update?

[CatinaT1]

Here is an FAQ: Why is Form MO-A Section D calculating incorrectly? You can sign up here for updates.

[BoCoMoBM]

Thanks, but it is still disappointing that TurboTax would make people search for this very specific information instead of making it clear on the Missouri TurboTax form that people with pensions should wait to file. A lot of teachers are going to never know that by trusting TurboTax, they paid $1500 or more in extra state taxes.

[BillM223]

BoCoMoBM: "As of 2024, it should be untaxed no matter your income."

Where do you see this? I don't see this in the MO instructions at all, and the forms still limit this pension income to $46,381 when combined with Social Security.

Even the PSRS/PEERS website says that this income can be taxable.

Where are you getting this PSRS pension should not be taxable? Are you receiving Social Security?

@BoCoMoBM 

[BoCoMoBM]

From the PSRS website: "Starting with the 2024 tax year, this exemption is no longer limited by your filing status or Missouri adjusted gross income. Please also note that the public pension exemption is capped at the maximum Social Security benefit of each individual in a household."

The amount of your combined pension and Social Security are capped at the $46,381 maximum Social Security benefit, but even this was phased out in previous years if your income was greater than $100,000 (if married, filing combined) or $85,000 (if single, etc.). Starting this year, you can get the $46,381 exemption no matter what you and your spouse made.

This is obviously only for Missouri taxes. PSRS Pensions are still fully taxable income on Federal tax forms.

[BoCoMoBM]

Best link on Missouri Department of Revenue page:

https://dor.mo.gov/faq/taxation/individual/pension-tax-year-2024.html

[BillM223]

Ah, I now see that the problem is on Section D. I was thinking the problem was on Section A, but it is being calculated correctly.

Instead, the calculation on Section D is not including the amount on line 5 of Section; that is what is being reviewed. Catina's post points you in the right direction.

[BoCoMoBM]

This is fixed as of this morning. I just e-filed mine with the correct refund amount.