Does Missouri Tax Social Security or Retirement Income? 2026 Update

Missouri does not tax Social Security benefits.² Since the 2024 tax year, 100% of Social Security is exempt from Missouri state income tax for anyone age 62 or older, with no income limits at all.²

That is the good news, and it is the part most articles stop at.

Here is what they leave out: Missouri still taxes your 401(k) withdrawals, your IRA distributions, and most private pensions. And Missouri treats a public pension and a private pension so differently that two retirees with identical incomes can owe wildly different amounts. If your retirement income plan was built on “Missouri doesn’t tax retirement income,” it was built on a half-truth.

What Missouri Exempts and Who Qualifies

Social Security, 100% exempt. Missouri exempts 100% of Social Security benefits for individuals age 62 or older, and 100% of Social Security disability benefits. There are no income limits.²

Public pensions, deductible, up to a cap. Public retirement benefits (state, local, federal, teacher, and other government pensions) can be deducted up to the maximum Social Security benefit amount, which for 2026 is $48,967.¹⁴

But here is the catch nobody explains: if you also claim the Social Security deduction, your public pension exemption is reduced by that amount.³ You do not get both at full value. That single sentence is worth thousands of dollars to a retired teacher or state employee, and it is almost never mentioned.

What Missouri Still Taxes

This is the part that surprises people.

• 401(k) withdrawals, taxable above a small exemption (see below)
• Traditional IRA distributions, taxable above a small exemption (see below)
• RMDs (Required Minimum Distributions), taxable above a small exemption (see below)
• Private pensions, taxable above a small exemption (see below)
• Annuity income from non-qualified accounts, the taxable portion is taxed
• Interest and dividends, taxable

Roth IRA withdrawals are not taxed, because they were already taxed going in.⁷

Public Pension vs. Private Pension: The Missouri Gap

This is the biggest and least understood difference in the Missouri tax code.

A public pension can be deducted up to $48,967 (2026), with no income limits since 2024.¹⁴

Privately funded retirement income gets a maximum exemption of $6,000. Missouri counts a private pension, a 401(k), a Keogh, a deferred compensation plan and a traditional IRA as the same thing here, though not a Roth IRA. Even that $6,000 phases out once your Missouri adjusted gross income passes $25,000 (single), $32,000 (married filing combined), or $16,000 (married filing separately).³¹³

Read that again. For most retirees with private-sector retirement income, the Missouri exemption is effectively zero. A retired public school teacher and a retired factory worker with the same pension income can face completely different Missouri tax bills.

A note on what did not happen. A bill (HB 426) was introduced to fully exempt private retirement income, 401(k)s, IRAs, and private pensions, beginning in 2026.¹² It did not become law.¹⁰¹¹ Several websites currently claim this exemption exists. It does not. The Missouri Department of Revenue’s own guidance still shows the $6,000 private pension cap with income limits.³ Do not plan around an exemption that was never enacted.

Missouri Just Eliminated Its Capital Gains Tax

This is genuinely new, and most retirement content has not caught up to it.

Missouri now fully exempts individuals from state capital gains tax under HB 594. Effective January 1, 2025, individuals may subtract 100% of capital gains reported for federal purposes when calculating Missouri adjusted gross income, short-term and long-term, on stocks, real estate, and other assets.¹

What this means for your retirement income:

• If you hold an after-tax brokerage account or a transfer-on-death account, selling appreciated positions no longer creates a Missouri tax bill.
• It does not apply to your IRA or 401(k). Withdrawals from those accounts are ordinary income, not capital gains, and Missouri still taxes them at ordinary rates.

That distinction changes the withdrawal-order math for a lot of Missouri retirees. The account you always assumed was expensive to tap may now be the cheapest one you own.

Missouri’s Tax Rates in 2026

Missouri’s top individual income tax rate is 4.7% for the 2026 tax year. Brackets are indexed for inflation annually; for 2026 the top rate applies to taxable income above roughly $9,436 for a single filer.⁴

Missouri has been stepping this rate down over several years through revenue-triggered reductions, it was 6% not long ago. Further cuts depend on the state hitting revenue benchmarks.⁹

The rate applies to income falling outside the exemptions above, which for most retirees means their 401(k) and IRA withdrawals.

Federal Social Security Taxes Still Apply

Missouri exempting your Social Security does not mean the IRS does.

Federal taxation of Social Security is based on your provisional income, your adjusted gross income, plus tax-exempt interest, plus half your Social Security benefit:

• Single: provisional income between $25,000 and $34,000 means up to 50% of your benefit becomes taxable. Above $34,000, up to 85% becomes taxable.⁵
• Married filing jointly: between $32,000 and $44,000, up to 50%. Above $44,000, up to 85%.⁵

These federal thresholds have never been indexed for inflation. They were set decades ago and have not moved.⁸ Every year, more retirees cross them without changing a thing.

One more Missouri-specific trap: the new federal senior deduction created by the 2025 federal tax law cannot be claimed on your Missouri return. Missouri statutes contain no corresponding provision.¹ A deduction that helps you federally does nothing for you at the state level.

Why This Matters for Missouri Retirement Income Planning

Every dollar you pull from a 401(k) or traditional IRA does two things at once in Missouri:

• It gets taxed by Missouri at ordinary rates, up to 4.7%.
• It raises your provisional income, which can drag more of your federally tax-free Social Security into taxation.

That second effect is the one that quietly costs people. It is why a Missouri retiree can withdraw an extra $10,000 and discover that far more than $10,000 became taxable.

The retirees who do best in Missouri are the ones who plan the order they draw income in, not just the amount.

How Missouri’s Exemption Affects IRMAA Planning

IRMAA (Income-Related Monthly Adjustment Amount) is the Medicare surcharge added to your Part B and Part D premiums when your income crosses certain thresholds.⁶

Missouri exempting your Social Security from state tax does nothing for IRMAA. IRMAA is calculated from your federal modified adjusted gross income, and your 401(k) and IRA withdrawals count toward it in full.

Worse, IRMAA is a cliff, not a slope. One dollar over a threshold raises your premium for the entire year. A large Roth conversion or an unusually big withdrawal can trip it without warning, and the surcharge shows up two years later.

Summary

• Missouri does not tax Social Security, 100% exempt, age 62+, no income limits, since 2024.
• Missouri does tax 401(k) withdrawals, IRA distributions, and RMDs, above a $6,000 exemption that phases out at low incomes.
• Public pensions are deductible up to the maximum Social Security benefit, $48,967 for 2026, reduced by any Social Security deduction claimed.
• Privately funded retirement income, a private pension, a 401(k) or a traditional IRA alike, gets only a $6,000 exemption, phasing out above $25,000 / $32,000 of Missouri AGI.
• Missouri eliminated capital gains tax, but that helps after-tax brokerage accounts, not your IRA or 401(k).
• Federal taxes on Social Security still apply, and those thresholds have never been adjusted for inflation.
• The federal senior deduction cannot be used on a Missouri return.

Frequently Asked Questions

Does Missouri tax Social Security benefits in 2026?

No. Missouri exempts 100% of Social Security benefits for individuals age 62 or older, with no income limits.²

Does Missouri tax 401(k) withdrawals?

Yes. Missouri taxes withdrawals from 401(k) plans as ordinary income, above the same $6,000 privately funded retirement exemption that applies to a private pension. That exemption phases out above $25,000 of Missouri adjusted gross income for single filers and $32,000 for married filing combined, so for many retirees it is worth nothing.

Does Missouri tax IRA distributions?

Yes, traditional IRA distributions are taxable in Missouri, above the same $6,000 privately funded retirement exemption that applies to a private pension, which phases out at low incomes. Roth IRA withdrawals are not, because those contributions were already taxed.

Does Missouri tax pensions?

It depends on the type. Public pensions are deductible up to the maximum Social Security benefit, which for 2026 is $48,967. Your deduction is reduced by any Social Security deduction claimed. Privately funded retirement income, which Missouri defines to include private pensions, 401(k) plans and traditional IRAs but not Roth IRAs, receives only a $6,000 exemption, which phases out above $25,000 of Missouri adjusted gross income for single filers and $32,000 for married filing combined.

Are RMDs taxable in Missouri?

Yes. Required Minimum Distributions from traditional IRAs and 401(k)s are taxed as ordinary income in Missouri, above the same $6,000 privately funded retirement exemption, which phases out at low incomes.

Is Missouri tax-friendly for retirees?

Partly. Social Security is fully exempt and capital gains are now fully exempt, which is unusually generous. But 401(k) and IRA withdrawals, the main income source for most retirees, are fully taxable, and the private retirement exemption is small enough to be meaningless for many.

Did Missouri eliminate taxes on retirement income in 2026?

No. A bill to fully exempt private retirement income (HB 426) was introduced but did not become law. Some websites incorrectly report that this exemption exists. It does not.

Does Missouri’s Social Security exemption reduce my Medicare IRMAA surcharges?

No. IRMAA is calculated from your federal modified adjusted gross income. A state exemption has no effect on it.

Should Missouri retirees still consider Roth conversions?

Missouri’s exemptions do not remove the case for Roth conversion planning, because 401(k) and IRA dollars remain fully taxable at the state level and count toward both federal Social Security taxation and IRMAA. Whether a conversion makes sense depends entirely on your individual situation.

See it on your own numbers

Related: See your own Tax Avalanche · How much guaranteed income can $200,000 create in Missouri? · When should I claim Social Security?

Educational only. Not tax, legal, or individualized investment advice. Missouri tax information is current as of 2026 and subject to change. Figures are sourced from the Missouri Department of Revenue (dor.mo.gov). Federal Social Security taxation rules are sourced from ssa.gov and IRS Publication 915. Kurt H. Jackson is Life and Health Insurance Licensed in MO, NE, KS, IA, and FL, and is not a securities broker, registered investment advisor, or CPA. Always consult a qualified tax or legal professional for advice specific to your situation.

Sources

1. Missouri Department of Revenue, Individual Income Tax Year Changes. The state’s official summary of what changed for Missouri taxpayers, including the 100% capital gains subtraction under Section 143.121 effective January 1, 2025, and confirmation that the new federal senior deduction cannot be claimed on a Missouri return.
2. Missouri Revised Statutes, Section 143.125, Social Security benefits exemption. The Missouri statute itself, stating that for all tax years beginning on or after January 1, 2024, a taxpayer receives the maximum Social Security exemption regardless of filing status or Missouri adjusted gross income. Last amended by Senate Bill 190, effective August 28, 2023, with no change since. Read at the Revisor September 3, 2026.
3. Missouri Department of Revenue, Form MO-A, Individual Income Tax Adjustments (2025). The Missouri schedule where retirees calculate the public pension deduction cap and the $6,000 private pension exemption, including the $25,000, $32,000 and $16,000 income phase-out thresholds.
4. Missouri Department of Revenue, 2026 Missouri Withholding Tax Formula (Form 4282). Missouri’s published 2026 tax steps, showing the inflation-indexed brackets ending at the 4.70% top rate.
5. IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits. The federal rules for provisional income and the thresholds at which up to 50% and up to 85% of a Social Security benefit becomes taxable.
6. Medicare.gov, Medicare costs. The official Medicare cost pages covering Part B and Part D premiums and the income-related monthly adjustment amount, known as IRMAA.
7. IRS Publication 590-B, Distributions from Individual Retirement Arrangements. The federal rules for traditional IRA and 401(k) distributions, required minimum distributions, and why a qualified Roth withdrawal comes out tax free.
8. Social Security Administration, Research Note #12, Taxation of Social Security Benefits. The agency’s own history of the 1983 law, stating that the income thresholds were intentionally not indexed, which is why more retirees cross them every year.
9. Missouri Revised Statutes, Section 143.011, resident individual tax rates and rate reductions. The statute setting Missouri’s bracket structure and the revenue triggers that step the top rate down over time.
10. Missouri House of Representatives, official bill record for HB 426 (2025 regular session). The chamber’s own record for the private pension bill, showing its last action was being replaced with a substitute and folded into HB 44.
11. Missouri House of Representatives, official bill record for HB 44 (2025 regular session). The combined bill, SCS HCS HBs 44 & 426, whose last recorded action was Voted Do Pass in the Senate on May 5, 2025, with no passage and no signature, which is why no private retirement exemption exists today.
12. Missouri House Bill 426 (2025), bill text as introduced. The bill itself, proposing that for all tax years beginning on or after January 1, 2026, one hundred percent of any retirement allowance received from privately funded sources be subtracted from Missouri adjusted gross income, regardless of filing status or income.
13. Missouri Revised Statutes, Section 143.124, annuities, pensions and retirement allowances. The statute governing the private retirement exemption, which defines a retirement allowance to include 401(k) plans, deferred compensation plans, Keogh plans and IRAs, but not Roth IRAs.
14. Missouri Department of Revenue, Pension FAQs. The department’s own answer to how much the maximum Social Security benefit amount is, carrying the year by year table that gives $46,381 for the 2024 tax year, $47,633 for 2025 and $48,967 for 2026, which is the ceiling on the Missouri public pension deduction.

Missouri and federal figures change, so confirm current amounts before you act.