Missouri MOST Distributions: Tax Implications for 2025
Missouri residents who receive distributions from the Missouri for Tuition Program (MOST), a qualified 529 plan, should be aware of specific tax rules when filing their state income tax return. While federal tax treatment of 529 distributions may be favorable if used for qualified education expenses, Missouri has its own set of rules that may affect how these distributions are reported.
Missouri Modifications for MOST Distributions
According to Missouri’s Form MO-1040 instructions, nonqualified distributions received from the Missouri for Tuition Program (MOST) or other qualified 529 plans are considered Missouri modifications. These modifications are subtracted from your federal adjusted gross income (AGI) when calculating your Missouri taxable income.
- Nonqualified distributions (i.e., distributions not used for qualified education expenses) are subject to Missouri income tax.
- These distributions must be reported on Form MO-1040, and the amount is subtracted from your federal AGI as part of Missouri’s modifications.
- Only distributions that are included in your federal AGI are considered for Missouri tax purposes.
How to Report MOST Distributions on Form MO-1040
When completing your Missouri state tax return, you must account for MOST distributions as part of the Missouri modifications section. This is typically found on Line 4 of Form MO-1040, where you list adjustments to federal AGI. The amount of the nonqualified distribution should be entered as a subtraction.
Ensure you attach your federal Form 1040 or 1040-SR to support the amount reported, as Missouri requires this documentation for verification.
Important Considerations
- Only nonqualified distributions are subject to Missouri tax. Qualified distributions (used for tuition, books, supplies, etc.) are generally excluded from Missouri taxable income.
- Missouri does not offer a state-level exclusion for 529 plan earnings like some other states. Therefore, any earnings portion of a nonqualified distribution is taxable in Missouri.
- If you are filing a composite return for nonresident partners or shareholders, you must use Form MO-1040 and attach a schedule listing each individual’s Missouri-source income.
Source:
Form MO-1040 Instructions
Form MO-1040A Instructions
Disclaimer: Always verify details with the official Federal or State Department of Revenue Forms and Instructions before filing your return.