| SB 0015 | Private Pension Exemption, Dependency Exemption Deduction to $1,000, Educational Expenses Tax Credit |
| Sponsor: | Mathewson | |||
| LR Number: | S0254.02I | Fiscal Note: | 0254-02 | |
| Committee: | Ways and Means | |||
| Last Action: | 01/21/97 - Hearing Conducted S Ways & Means Committee | Journal page: | ||
| Title: | ||||
| Effective Date: | January 1, 1998 | |||
SB 15 -- This act incorporates three income tax changes; a private pension deduction, an increase in the dependency deduction exemption and a credit for educational expenses or contributions to scholarship charities.
PRIVATE PENSION -- For all tax years beginning after December 31, 1997, this act establishes an income tax exemption for income obtained from privately funded annuities, pensions, or other retirement allowances. Retirees would be allowed to deduct $6,000 if filing an individual return with an adjusted gross income less than $25,000 or if filing a combined return with an adjusted gross income less than $32,000. This provision is identical to the exemption granted to state and federal retirees in 1990 as a result of a U.S. Supreme Court ruling.
This provision is similar to SB 585 (1996), SB 12 (1997) and SB 41 (1997) and is similar to provisions in SCS/HS/HCS/HB 1172 (1996).
DEPENDENCY EXEMPTION -- For all tax years beginning on or after January 1, 1998, the dependency exemption deduction is increased to $1,000. Until December 31, 1997, the deduction shall remain at $400.
EDUCATIONAL EXPENSES -- This act provides an income tax credit for educational expenses and contributions to qualified scholarship charities.
The maximum amount of the credit for educational expenses incurred in attending a qualified school is $500, with the amount phased out for taxpayers with a taxable income in excess of $50,000. If the credit exceeds the income tax payable, the excess shall be considered an overpayment of the income tax.
Qualified school includes any public or private post- secondary school located in Missouri.
Educational expenses include tuition, education fees, school supplies or other educational expenses as defined by the Department of Revenue regulation and which are incurred in attending a qualified school.
For cash contributions to a qualifying scholarship charity, the credit shall not exceed 50% of the amount contributed.
Corporations with registered agents in the state are authorized to participate in both of these credits, subject to the same $500 and 50% limits.
These provisions are similar to SB 4 (1997).
RUSS HEMBREE