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The Missouri College Savings Plan Deduction for MO Residents

Rules for Claiming an Income Tax Deduction for Funding a Missouri 529 Plan

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Overview of the Missouri 529 Plan Tax Deduction:

Missouri residents contributing to a Missouri 529 plan receive a state income tax deduction of up to $8,000 "per tax return" for each adult taxpayer. This means that even if a Missouri resident contributes more than $8,000 on behalf of multiple beneficiaries (children), they are still only allowed to deduct a maximum of $8,000 on their return. Any amount contributed over the limit is not deductible and may not be carried forward.

Couples filing jointly may deduct a combined maximum of $16,000 ($8,000 per taxpayer). Again, total contributions across all beneficiaries made above $16,000 are not deductible and may not be carried forward.

The Missouri 529 plan deduction is an "above the line" income adjustment, meaning residents can claim it even if they do not itemize their other deductions (opting for the standard deduction). There is no income phaseout on the Missouri 529 plan tax deduction.

Value of the Missouri 529 Plan Tax Deduction:

Missouri residents trying to decide whether to use the Missouri college savings plan versus another state's Section 529 plan need to account for the potential tax savings of contributing to their in-state plan.

Considering that the top Missouri income tax rate is 6.00%, a full deduction of $8,000 can save a taxpayer up to $480 at tax time. Currently, Missouri does not offer a tax deduction for contributing to other types of college savings accounts such as a Coverdell Education Savings Account (ESA) or UTMA Custodial Account.

Claiming the Missouri 529 Plan Tax Deduction:

Residents can claim the Mississippi college savings plan tax deduction on line 8 of their Missouri Form MO-A.

Reference and Documentation:

Additional information on the Missouri 529 plan tax deduction can be found on the Missouri Department of the Revenue website and the official Missouri college savings plan website.

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