If Missouri allows certain income to be excluded from state taxation, you may be able to claim those amounts in the Subtractions From Income section of your Missouri return. These subtractions are reported on Form MO-A, Missouri Itemized Deductions and Modifications, and can reduce your Missouri taxable income.
What Are Missouri Subtractions From Income?
Missouri starts with your federal adjusted gross income (AGI) and allows certain modifications that reduce the amount of income subject to Missouri tax. The Subtractions From Income section includes both standard Missouri subtractions and specialized worksheets for health insurance premiums and business income.
Qualified Health Insurance Premiums
What Is the Qualified Health Insurance Premium Subtraction?
Missouri may allow a subtraction for qualified health insurance premiums. Amounts claimed on federal Schedule A are automatically pulled into the Missouri health insurance worksheet and allocated between the taxpayer and spouse based on federal adjusted gross income.
The screen allows you to adjust the calculated amounts if needed. The program notes that changes to federal adjusted gross income may also change the calculated health insurance premium subtraction.
How Do I Enter Qualified Health Insurance Premiums?
- Select Begin next to Qualified Health Insurance Premiums.
- Review the calculated premium amounts.
- Enter any adjustment needed for the taxpayer.
- Enter any adjustment needed for the spouse.
- Continue through the Missouri return.
Helpful Tips
- Schedule A health insurance premiums are used in the calculation when applicable.
- Adjustments should only be entered when the calculated amount needs correction.
- Changes to federal AGI may affect the Missouri calculation.
Missouri Source Business Income Deduction
What Is the Business Income Deduction?
Missouri allows a subtraction from federal adjusted gross income for certain Missouri-source business income.
The Business Income Deduction screen includes fields for:
- Missouri source net profit from Federal Schedule C (losses are not allowed)
- Missouri source net profit (loss) from Federal Schedule E, Part II
- Missouri source net profit (loss) from Federal Schedule F and Form 4835
- Agricultural disaster relief payments
How Do I Enter the Business Income Deduction?
- Select Begin next to Missouri Source Business Income Deduction.
- Enter the Missouri-source Schedule C net profit for the taxpayer and spouse, if applicable.
- Enter Missouri-source Schedule E income or loss.
- Enter Missouri-source Schedule F or Form 4835 income or loss.
- Enter qualifying agricultural disaster relief payments.
- Review the entries and continue.
Helpful Tips
- Schedule C losses are not permitted in the Schedule C entry field.
- Only Missouri-source business income should be entered.
- Schedule E, Schedule F, and Form 4835 amounts should reflect Missouri-source activity.
Missouri Higher Education 529 Contributions
What Is the 529 Contribution Subtraction?
Missouri allows a subtraction for qualifying contributions made to a Missouri Higher Education 529 savings plan.
Enter the contribution amount separately for the taxpayer and spouse if filing jointly.
Federal Agency Obligations Interest
What Is the Federal Obligations Interest Subtraction?
Interest from certain federal obligations may be exempt from Missouri income tax.
Enter any qualifying federal obligations interest included in federal adjusted gross income.
Separate taxpayer and spouse fields are provided.
Agricultural Disaster Relief
What Is the Agricultural Disaster Relief Subtraction?
Missouri allows certain qualifying agricultural disaster relief payments to be subtracted from income.
Enter the eligible amount for the taxpayer and spouse when applicable.
Depreciation Adjustment
What Is the Depreciation Adjustment?
Missouri depreciation rules may differ from federal depreciation rules.
Use this field to enter any required Missouri depreciation adjustment.
Separate taxpayer and spouse fields are available.
ABLE Program Contributions
What Is the ABLE Program Contribution Subtraction?
Missouri may allow a subtraction for contributions made to a qualifying Achieving a Better Life Experience (ABLE) program.
Enter the allowable contribution amount separately for the taxpayer and spouse.
Railroad Retirement Benefits
What Is the Railroad Retirement Benefit Subtraction?
Taxable Railroad Retirement benefits included in federal taxable Social Security income may qualify for a Missouri subtraction.
The Missouri return notes that Railroad Retirement benefits carried automatically to Form MO-A should not be entered again in this section.
Military Pension Subtraction
What Is the Military Pension Subtraction?
Missouri allows a subtraction for qualifying military pension income.
Enter the eligible amount for the taxpayer and spouse if applicable.
Capital Gain Subtraction Adjustment
What Is the Capital Gain Subtraction Adjustment?
Missouri may allow a subtraction for qualifying capital gains.
The capital gain subtraction is generally calculated automatically by the program. This field should only be completed if an adjustment to the automatically calculated amount is needed.
Other Subtractions From Income
What Other Missouri Subtractions Can Be Entered?
If a subtraction does not fit within one of the standard categories above, enter the amount in the Other Subtractions From Income section and identify the source.
The program includes options for:
- Partnership income
- Fiduciary income
- S Corporation income
- Net Operating Loss adjustments
- Military nonresident income
- Combat pay included in federal AGI
- Build America and Recovery Zone Bond interest
- Missouri Public-Private Transportation Act income
- Business interest adjustments
- Other qualifying Missouri subtractions
If Other is selected, you must enter a description of the subtraction.
How Do I Enter Other Subtractions?
- Enter the subtraction amount.
- Select the source of the subtraction.
- If selecting Other, enter a description of the subtraction.
- Continue through the Missouri return.
Missouri Instructions - Form MO-A
Missouri subtractions and modifications are reported on Form MO-A, Missouri Itemized Deductions and Modifications.
For detailed instructions regarding allowable Missouri subtractions and reporting requirements, see:
Missouri Form MO-A Instructions
Helpful Tips
- Enter only subtractions specifically allowed by Missouri.
- If filing jointly, enter amounts for the taxpayer and spouse in the appropriate fields.
- Missouri-source business income should be limited to income attributable to Missouri.
- Partnership, fiduciary, and S corporation adjustments may require information from a Schedule K-1.
- The capital gain subtraction is generally calculated automatically.
- Do not duplicate Railroad Retirement benefits already carried to Form MO-A by the program.
- Keep records supporting all subtraction amounts claimed.
Program Pathway
State Section > Missouri Return > Edit > Subtractions From Income