Update Missouri 2025 Individual Income Tax Model

[DTrim99]

Overview

Update Missouri income tax model for tax year 2025. The 2025 MO-1040 Instructions are now available. All parameters need 2025 references added regardless of whether values changed.

Key 2025 Sources

• 2025 MO-1040 Instructions
• 2025 Tax Year Changes
• 2025 Tax Chart
• 2025 MO-PTC Property Tax Credit Instructions
• 2025 Property Tax Credit Chart

Parameters Requiring 2025 Reference Updates

Tax Rates and Brackets

• rates.yaml (p.26) - Top rate 4.7%, brackets already have 2025 values - add 2025 reference
• minimum_taxable_income.yaml (p.26) - $1,313 threshold already present - add 2025 reference with page number

Deductions

• deductions/business_income/rate.yaml (p.16) - 20% rate - verify unchanged, add 2025 reference
• deductions/federal_income_tax/cap.yaml (p.8) - $10,000/$5,000 caps - add 2025 reference
• deductions/itemized.yaml - add 2025 reference

Social Security and Pension Deductions

• deductions/social_security_and_public_pension/mo_ss_or_ssdi_exemption_threshold.yaml - add 2025 reference
• deductions/social_security_and_public_pension/mo_ss_or_ssd_deduction_allowance.yaml - add 2025 reference
• deductions/social_security_and_public_pension/mo_public_pension_deduction_allowance.yaml - add 2025 reference
• deductions/social_security_and_public_pension/income_threshold_applies.yaml - add 2025 reference
• deductions/mo_private_pension_deduction_allowance.yaml - add 2025 reference
• deductions/mo_max_private_pension.yaml - add 2025 reference
• deductions/social_security_and_public_pension/mo_max_social_security_benefit.yaml - ADD 2025 VALUE (~$48,216 at FRA based on SSA data)

Credits

• credits/wftc/match.yaml - 20% match - verify unchanged, add 2025 reference

Property Tax Credit (use MO-PTC_2025.pdf)

• credits/property_tax/age_threshold.yaml - add 2025 reference
• credits/property_tax/property_tax_limit.yaml - $1,100 - add 2025 reference
• credits/property_tax/rent_property_tax_limit.yaml - $750 - add 2025 reference
• credits/property_tax/income_offset/joint_owner.yaml - add 2025 reference
• credits/property_tax/income_offset/joint_renter.yaml - add 2025 reference
• credits/property_tax/income_offset/non_joint.yaml - add 2025 reference
• credits/property_tax/phase_out/threshold.yaml - add 2025 reference
• credits/property_tax/phase_out/rate.yaml - add 2025 reference
• credits/property_tax/phase_out/step.yaml - add 2025 reference
• credits/property_tax/property_tax_rent_ratio.yaml - add 2025 reference
• credits/property_tax/aged_survivor_min_age.yaml - add 2025 reference
• credits/property_tax/public_assistance_types.yaml - add 2025 reference

Capital Gains Subtraction

• subtractions/net_capital_gain/rate.yaml - 100% for 2025 already present - add 2025 MO-1040 Instructions reference
• subtractions/agi_subtractions.yaml - add 2025 reference

New Program to Model

Homestead Disaster Deductible Credit (NEW for 2025)

From 2025 Tax Year Changes:

"Effective January 1, 2025, an individual taxpayer in a presidential disaster declaration area that incurred an insurance deductible during 2025 could be eligible to receive a tax credit up to $5,000. The credit is not refundable but can be carried forward up to twenty-nine years. The amount allowed to be redeemed in the first year is $90 million, with a limit of $45 million thereafter."

Implementation needed:

• Create credits/homestead_disaster/ parameter folder
• Parameters: max_credit.yaml ($5,000), carryforward_years.yaml (29), eligibility criteria
• Variables: mo_homestead_disaster_credit.py, eligibility variables
• This requires knowing if household is in a presidential disaster area (may need new input variable)

Tests Required

• Add 2025 test cases for mo_income_tax.yaml
• Add 2025 test cases for mo_taxable_income.yaml
• Add 2025 test case for capital gains subtraction at 100%
• Update integration tests with 2025 period
• Verify WFTC continues at 20% match for 2025

Key 2025 Tax Parameters Summary

Parameter	2025 Value	Source Page
Top tax rate	4.7%	MO-1040 p.26
Minimum taxable income	$1,313	MO-1040 p.26
Tax bracket 1 (2%) threshold	$1,313	MO-1040 p.26
Tax bracket 2 (2.5%) threshold	$2,626	MO-1040 p.26
Tax bracket 3 (3%) threshold	$3,939	MO-1040 p.26
Tax bracket 4 (3.5%) threshold	$5,252	MO-1040 p.26
Tax bracket 5 (4%) threshold	$6,565	MO-1040 p.26
Tax bracket 6 (4.5%) threshold	$7,878	MO-1040 p.26
Tax bracket 7 (4.7%) threshold	$9,191	MO-1040 p.26
Business income deduction	20%	MO-1040 p.16
Capital gains subtraction	100%	MO-1040 p.12
WFTC match	20%	MO-1040 p.10
Property tax credit (owners)	$1,100	MO-PTC
Property tax credit (renters)	$750	MO-PTC

Implementation Notes

1. Memory Management: Break implementation into phases:

   • Phase 1: Update tax rate/bracket references
   • Phase 2: Update deduction references
   • Phase 3: Update credit references
   • Phase 4: Update property tax credit references
   • Phase 5: Add new Homestead Disaster Credit
   • Phase 6: Add tests

2. Reference Format: All 2025 references should include page numbers where applicable:

   - title: 2025 MO-1040 Book - Individual Income Tax Long Form
     href: https://dor.mo.gov/forms/MO-1040%20Instructions_2025.pdf#page=XX

3. Form Changes: Note that MO-PTS (Property Tax Schedule) is now MO-PTC (Property Tax Credit Claim) for standalone filers

4. Standard Deduction: Missouri uses federal standard deduction - no state-specific parameter needed for 2025:

   • Single: $15,750
   • MFJ: $31,500
   • MFS: $15,750
   • HOH: $23,625