|SPRINGFIELD - Gov. Matt Blunt on July 5, 2007, signed legislation that will end the tax on Social Security benefits many Missouri seniors by phasing in a state income tax exemption over six years. The tax relief package for Missouri’s seniors, according to the governor, was one of his top priorities during the legislative session. However, the legislation expires six years from its effective date of January 1, 2007.
For 2007, a taxpayer aged 62 or older can deduct 20% of these benefits; for 2008, 35%; for 2009, 50%; for 2010, 65%; for2011, 80%; and for 2012 and in its final year, 100%. A single taxpayer with an adjusted gross income of $85,000 or less or a married taxpayer filing a combined return with an adjusted gross income of $100,000 or less will qualify for the maximum deduction. If a taxpayer's adjusted gross income exceeds the income amount, the deduction will be decreased by $1 for every dollar in excess of the maximum. Other caveats apply.
Speaker Rod Jetton, sponsor of the bill, said: “We were extremely pleased to provide a tax cut for our seniors this year. Missouri was just one of 15 states that still even collected this tax, and by getting rid of it we were able to bring some tax justice to some of our citizens. By eliminating this tax we were able to make Missouri a retiree friendly state and, I believe, potentially attract retirees to Missouri. This would never have been possible however if the economic climate in our state hadn’t turned around, and we continue to hear good news as our employment numbers rise. Ending this tax also represented a strong coalition of bipartisan support; it started with the leadership of the Governor and was carried to both parties in the House and the Senate as well as a great group of senior and retiree advocates.”
Jetton's comments seem a bit "enthusiastic" considering the possible sunsetting of the bill. For complete details on the bill, go go here.