MO state public pension exemption

Forum|Forum|6 years ago
February 22, 2020
2 replies
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I was a resident in MO until 6/15/19 at which time I moved to TX. I'm filing my MO state taxes via Turbotax for those 6 months that I resided there. My understanding is that as a retired public school teacher on a public pension through PSRS, at least part of that pension should be exempt. Turbotax is saying that it is not even though my pension for the year is below $85,000. I'm assuming I've made an error somewhere in the process but I cannot find where that may be and I've gone through it half a dozen times. Please advise... I know that I marked my income as a public pension on my federal tax return because I went back and checked.

DavidS127

Level 13

The Missouri public pension exemption is a maximum of $38,437, but that maximum is reduced by any taxable social security/social security disability exemption (100% of any taxable social security).

Calculate the social security exemption first, and note that it is reduced by any amount your Missouri adjusted gross income (AGI) exceeds $85,000 ($100K for married filing jointly/combined).

Then, calculate the public pension exemption, and note that it is reduced by any amount Missouri AGI less taxable social security exceeds $85,000.

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lrhoffAuthor

Level 2

David - I do not receive any social security. This is what the turbotax state taxes review says:

Taxable Income

Federal Adjusted gross income - $67,045

Missouri additions - $0

Less MO subtractions - $7284

Exemptions/deductions

Pension/Retirement exclusion -$0 (this seems wrong but I don't know how to fix it)

Standard Deduction -$12,200

Federal tax deduction - $1188

Missouri taxable income - $46373

It says my net tax is $1185. I already paid $650 because half my pension was exempted last year. Please HELP. Turbo is still saying I need to pay another $535 to MO. Remember, I was only residing in the state for the first 6 months of the year.

DaveF1006

Level 15

Go to your federal return and navigate to the section where you entered your 1099R information. After you entered the 1099R, the prgram will ask you a series of questions.

you should come to a screen where the program will ask Did you receive the 1099R while living in these states?
you will check you lived in Missouri
You will come to a screen that says Where Is This Distribution From?
You will indicate that it is a public pension received from federal state or local government
Below that is the distribution amount that was earned when you lived in Missouri. From what you tell me,this should be roughly half of that amount. Then it will asked if it is a qualified plan and yes this is a qualified plan.

This should make a difference in your return.

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RichardWeter

Level 2

Missouri has always exempted salary for public servant employes in the past but this year there is no provision for this and in fact, the program does not recognize it. Has Missouri quit doing this or is there an error in the program?

BillM223

Level 15

"there is no provision for this and in fact, the program does not recognize it. "

In recent years, TurboTax has moved the question of the type of pension on the state level from the state interview to the 1099-R interview.

That is, go back to the 1099-R interview (Search for 1099-R and click on the jump-to result) and edit your 1099-R entry.

Be sure to go all the way through the 1099-R interview. Eventually, you will be asked what state this belongs to, and when you answer "Missouri", it will ask you what the source of the pension is.

This information is carried to the Missouri return to be handled appropriately.

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