Missouri Form Mo-A Instructions
PART 1 - Missouri Modifications to Federal Adjusted Gross Income
Form MO-A, Part 1, computes Missouri modifications to federal adjusted gross income. Modifications on Lines 1, 2, 3, 4 and 5 include income that is exempt from federal tax, but taxable for state tax purposes. Modifications on Lines 7, 8, 9, 10, 11, 12 and 13 exclude income that is exempt from state tax, but taxable for federal tax purposes. If after reviewing the instructions for Part 1, you have no modifications, enter on Form MO-1040, Lines 3 and 5, the same amount(s) entered on Form MO-1040, Line 1.
Line 1 - Interest on State and Local Obligations
If you received income from an obligation of a state or political subdivision other than Missouri, enter the amount of that income, reduced by the related expenses incurred (management fees, trustee fees, interest, etc.) if the expenses are more than $500.
Line 2 - Partnership, Fiduciary, S Corporation, Other
Enter positive adjustments (additions) reported from partnerships, fiduciaries, S corporations, or other sources. The partnership, fiduciary, or S corporation must notify you of the amount of any such adjustment (addition) to which you are entitled. Check the boxes applicable on Line 2 and attach a copy of the notification received.
Net Operating Loss - Carryback/Carry- forward:
In the year of your net operatingloss (NOL), enter on Form MO-A, Part 1, Line 2 the amount of your eligible NOL to be carried back or carried forward from the loss year. Enter the sum of the current year's NOL (as a positive number), plus any unused NOL from prior years. If your NOL carries forward from the carryback year, enter the unused portion of your NOL as computed on Federal Form 1045, Schedule B, Line 10. Please attach Federal Form 1045, Schedules A and B, or the calculation of your NOL carryback/carry- forward. Amended returns only: If yourfederal adjusted gross income includes an NOL (other than a farming loss) of more than two years, enter the loss amount as a positive number.
Non-medical Withdrawal from Individual Medical Account (IMA):
Any monies you withdraw from your Individual Medical Account (IMA) for non-medical purposes are taxable to Missouri. The interest earned on such monies is also taxable to Missouri. The amount subject to tax is reported on a statement provided by the administrator of the IMA.
Non-qualified Withdrawal from Family Development Account:
The amount of annual deposits previously subtracted must be added to your federal adjusted gross income if the withdrawal from the account was not for a qualified use.
Line 3 - Nonqualified Distribution from a Qualified 529 Plan
Any distribution made by the Missouri Savings for Tuition Program (MOST), the 529 plan administered by the Missouri Higher Education Deposit Program, or any other qualified 529 plan, not used for qualified higher education expenses, must be added to federal adjusted gross income of the taxpayer who made contributions to the plan. The amount of the distribution that must be added includes contributions previously exempt from state tax and earnings generated from the program (if the earnings are not already included in federal adjusted gross income). If the taxpayer who made the contribution is deceased, the beneficiary of the savings program must add the nonqualified taxable distribution to federal adjusted gross income on the Missouri income tax return.
Line 4 - Food Pantry Contributions included on Schedule A
If you are claiming the Food Pantry Tax Credit, (Form MO-FPT) and you included your donations as an itemized deduction on your Federal Schedule A, enter the amount of your donations, as noted on Form MO-FPT.
Line 5 - Nonresident Property Tax
If you are a nonresident or part-year resident and you reported property taxes paid to another state or political subdivision on Line 9 of your Federal Schedule A, you must report that amount on Line 5 of Form MO-A, unless that state or political subdivision allows a subtraction to income for Missouri property taxes. For a list of states that allow a subtraction for Missouri property taxes, visit http://dor.mo.gov/ faq/personal/nonresident.php.
Line 6 - Total Additions
Add Lines 1 through 5. Enter the totals on Form MO-A, Part 1, Line 6 and on Form MO-1040, Line 2.
Line 7 - Interest on Exempt Federal Obligations
Interest from direct obligations of the U.S. Government, such as U.S. savings bonds, U.S. treasury bills, bonds, and notes is exempt from state taxation under the laws of the United States. Attach a detailed list or all Federal Forms 1099. Taxpayers who claim exclusion for interest from direct U.S. obligations must identify the specific securities owned, e.g., "U.S. savings bond". A general description such as "interest on U.S. obligation" or "U.S. Government securities" is not acceptable. (See Regulation 12 CSR 10-2.150 for the taxability of various U.S. Government related obligations.) Failure to identify the specific security will result in the disallowance of the deduction.
A federally taxed distribution received from a mutual fund investing exclusively in direct U.S. Government obligations is exempt. If the mutual fund invests in both exempt (direct) and non-exempt (indirect) federal obligations, the deduction allowed will be the distribution received from the mutual fund attributable to the interest on the direct U.S. Government obligations, as determined by the mutual fund. Attach a copy of the year-end statement received from the mutual fund showing either the amount of money received or the percentage of funds received from direct U.S. Government obligations, or a summary statement received from the mutual fund which clearly identifies the exempt and non-exempt portions of the U.S. Government obligation interest. The statement does not need to list each obligation separately. Failure to attach the requested document will result in the disallowance of the deduction.
To arrive at the amount of related expenses, you may use actual expenses or a reasonable estimate. In general, you should use the same or similar method used to compute related expenses for federal income tax purposes, provided that the method reasonably reflects related expenses for Missouri-exempt income.
If you fail to compute reasonable related expenses, the Director of Revenue will make an adjustment based on the best information available. If sufficient information is not available or if your records do not provide sufficient information, the Director of Revenue will use the following formula to compute related expenses:
Total Income x Expense Items = Reduction to Exempt Income
The principal expense item in this formula is interest expense; however, the Director of Revenue may include other expense items because of their direct relationship to the production of exempt income. You may propose an alternative method provided that it properly reflects the amount of related expenses.
Line 8 - State Income Tax Refund
Enter the amount of any state income tax refund included in your federal adjusted gross income on Form MO-1040, Line 1 (from Federal Form 1040, Line 10). Attach a copy of Federal Form 1040 (pages 1 and 2).
Line 9 - Partnership, Fiduciary, S Corporation, Railroad Retirement Benefits, Other
Enter subtractions, reported from partnerships, fiduciaries, and S corporations. The partnership, fiduciary, and S corporation must notify you of the amount of any such subtraction to which you are entitled. Check the boxes applicable on Line 9 and attach a copy of the notification received. Failure to attach a copy of the notification furnished to you will result in the disallowance of the subtraction.
Railroad Retirement Benefits Administered by the Railroad Retirement Board, such as all Tier I and Tier II benefits and any railroad retirement sick pay, disability, and unemployment benefits, included in federal adjusted gross income (Form MO-1040, Line 1), are exempt from state taxation. Enter any such benefits received on Line 9.
If you have other subtractions, indicate the source on Line 9. Other subtractions include:
- Contributions into a Missouri Individual Medical Account (IMA). Contributions that were made by your employer into an Individual Medical Account (IMA) and used to pay your health care expenses are exempt from Missouri income tax. The interest income earned on the IMA account is also exempt from Missouri income tax. The IMA contribution is identified in Box 14 of your Form W-2, Wage and Tax Statement. Reduce the amount of contributions by the amount of medical and dental expenses deducted on Federal Form 1040, Schedule A, Line 4, but paid for by the IMA and included in Missouri itemized deductions.
- Additional Capital Gain Deduction Due to Difference in Basis. If during the taxable year you realized a gain from the sale of property or other capital assets that had a higher tax basis for Missouri tax purposes than for federal tax purposes, you may exclude the gain or the difference in the basis of the property so disposed, whichever is smaller. If the gain was considered a long-term capital gain for federal income tax purposes, the exclusion is limited to the gain or 50 percent of the difference, whichever is smaller. No difference in basis can be claimed for any property obtained after December 31, 1972. If your basis for Missouri purposes is less than the basis for federal income tax purposes, no adjustment is required.
- Accumulation Distribution. If during the taxable year, you received a distribution as beneficiary of a trust that was made from accumulated earnings of prior years and you filed Federal Form 4970, the amount of the distribution may be excluded from Missouri income to the extent that it was reported in your federal adjusted gross income.
- Capital Gain Exclusion on Sale of Low Income Housing. If during the taxable year, you sold a federally subsidized (HUD) low income housing project to a nonprofit or governmental organization, and at least 40 percent of the units are occupied by persons or families having incomes of 60 percent or less of the median income, you may exclude 25 percent of the capital gain from Missouri tax. However, the buyer of the property must agree to preserve or increase the low income occupancy of the project. To use this exclusion, enter 25 percent of the capital gain reported on your Federal Form 1040. Attach a copy of your Federal Form 1040 (pages 1 and 2) and Federal Form 4797.
- Family Development Account. A family development account holder may subtract the amount of annual deposits made to the account (not to exceed $2,000). Approved withdrawals from the family development account are also exempt from state tax. Interest earned by a family development account is exempt from state taxation and may be subtracted from an account holder's federal adjusted gross income. Any money withdrawn for an unapproved use is subject to tax. Attach proper certifi- cation and a copy of your Form 1099.
- Federally Taxable - Missouri Exempt Obligations. Income from any bond issued by the Missouri Higher Education Loan Authority (MOHELA), including interest or proceeds resulting from the sale of the bond, is exempt from Missouri tax. Enter the amount of such income included in federal adjusted gross income on Line 9.
- Military Income of Nonresident Military Personnel. Enter the amount of any military income received by nonresident military personnel stationed in Missouri. Nonresident active duty military service- members who are required to file a Missouri return may subtract the military income received from their federal adjusted gross income. Non-resident servicemembers' spouses who are in Missouri due to military orders, and have declared another state as their state of residence may subtract their income from their federal adjusted gross income. Attach a copy of the Form W-2 reporting your military income.
- Build America Bonds and Recovery ZoneBonds Interest. Enter any interest received from Build America or Recovery Zone Bonds that is included in your federal adjusted gross income. Attach a copy of your Form 1099-INT or any other applicable documentation.
- Combat Pay Included in Federal Adjusted Gross Income Earned by Military Personnel with a Missouri Home of Record. The IRS allows enlisted members, warrant officers and commissioned warrant officers to exclude their military pay received while serving in a combat zone, or while hospitalized as a result of injuries incurred while serving in a combat zone.
The exclusion of combat pay received by a commissioned officer, other than a commissioned warrant officer, is limited to the highest rate of enlisted pay. Subtract all military income received while serving in a combat zone, which is included in Federal Adjusted Gross Income (FAGI) and is not otherwise excluded. In most cases combat pay is not included in Box 1, Wages, of Form W-2 and therefore is not included in FAGI. However if Box 1 includes combat pay, the portion consisting of combat pay may be taken as a subtraction for Missouri purposes.
EXAMPLE 1: A resident of Missouri, is an enlisted member of the military. He enters a combat zone in July and is there through December. He earns $12,000 January through June, and earns $20,000 July through December. Box 1 of his Form W-2 should only indicate the $12,000 he received prior to entering the combat zone. He is not entitled to a subtraction, as his combat pay is not included in his FAGI.
EXAMPLE 2: A resident of Missouri, is a high-ranking commissioned officer. He enters a combat zone in July and is there through December. He earns $50,000 January through June, and earns $70,000 July through December. The IRS limits his exclusion to $40,000, causing Box 1 of his Form W-2 to indicate $80,000. He is entitled to a subtraction of $30,000, which repre- sents the portion of Box 1 of Form W-2 attributable to combat pay that is included in his FAGI.
- Net Operating Loss. Any amount of net operating loss taken against federal taxable income but disallowed for Missouri income tax purposes after June 18, 2002, (when choosing the five-year option at the federal level) may be carried forward and taken against any income on the Missouri income tax return for a period of up to 20 years from the year of the initial loss. Attach Federal Form 1045, Schedule A and B, and the calculation of your net operating loss carryback/carryforward.
- Missouri Public-Private Transportation Act. Enter any income received in connection with the Missouri Public- Private Transportation Act, that is included in your federal adjusted gross income.
- Condemnation of Property. If you included in your Federal Adjusted Gross Income any gain arising from compulsory or involuntary conversion of property as a result of condemnation or the imminence thereof, you may exclude that gain from Missouri tax Attach a copy of your Federal Form 1040, Schedule D, and Federal Form 4797.
Line 10 - Exempt Contributions Made to a Qualified 529 Plan
The state of Missouri allows a subtraction from federal adjusted gross income for the amount of annual contributions made to the Missouri Savings for Tuition Program (MOST), the 529 plan administered by the Missouri Higher Education Deposit Program, or any other qualified 529 plan. The maximum annual exempt contribution is $8,000 for single individuals or $16,000 for married couples filing a combined return. If you are a participant claiming a subtraction for a contribution made to the savings program, you must attach your statement provided by the program manager. The statement must be in the name of a plan participant (account owner) claiming the subtraction.
Line 11 - Qualified Health Insurance Premiums
Enter the amount you paid for health insurance premiums not to exceed your federal taxable income. Do not include any pre-tax premiums paid, any premiums excluded from federal taxable income, or any long term care insurance premiums. Use the worksheet on page 26 to determine your allowable subtraction.
Line 12 - Depreciation Adjustment
If you purchased an asset between July 1, 2002, and June 30, 2003, and you elected to use the 30 percent depreciation on your federal return, you may be able to subtract a portion of the depreciation. Enter the additional depreciation created by the Job Creation and Worker Assistance Act previously added back in prior years to the extent allowable by Section 143.121, (RSMo). This amount is computed by figuring the allowable depreciation prior to the Job Creation and Worker Assistance Act less the depreciation taken on your federal return. If you have previously taken an addition modifi- cation for a qualifying property, but have sold or disposed of the property during the taxable year, check the box on Line 12 and take a subtraction for the amount not previously recovered. More information and examples can be found on the Department's website at http://dor.mo.gov/pdf/depreciation_ examples.pdf.
Line 13 - Home Energy Audit Expenses
Enter the amount you paid for the costs incurred for a home energy audit or the implementation of any energy efficiency recommendations, to the extent the amounts paid were not subtracted from federal taxable income. The amount of the subtraction is limited to $1,000 per taxpayer or taxpayers filing a combined return per year, not to exceed $2,000 cumulatively. Please complete and attach Form MO-HEA found on page 25.
Line 14 - Total Subtractions
Add Lines 7 through 13. Enter the total on Form MO-A, Part 1, Line 14 and on Form MO-1040, Line 4.
Do not include income earned in other states on Line 14. Complete Form MO-NRI (Missouri Income Percentage) or Form MO-CR (Credit for Income Taxes Paid to Other States or Political Subdivisions). See Form MO-1040, Line 26 or Line 27.
PART 2 - MISSOURI ITEMIZED DEDUCTIONS
You cannot itemize your Missouri deductions if you took the standard deduction on your federal return. See Page 7, Line 14. You must itemize your Missouri deductions if you were required to itemize on your federal return.
Line 1 - Federal Itemized Deductions
Include your total federal itemized deductions from Federal Form 1040, Line 40, and any approved cultural contributions (literary, musical, scholastic, or artistic) to a tax exempt agency or institution that is operated on a not-for-profit basis. Cash contributions do not qualify.
Lines 2 and 3 - Social Security Tax
Include the amount of the social security tax withheld from your Form(s) W-2. This amount cannot exceed $7,049. Enter the total on Line 2. Repeat for your spouse and enter the total on Line 3.
Lines 4 and 5 - Railroad Retirement Tax
Include the amount of railroad retirement tax withheld from your wages, Tier I and Tier II, during 2013. This amount cannot exceed $10,758 (Tier I maximum of $7,049 and Tier II maximum of $3,709). Enter the total on Line 4. Repeat for your spouse and enter the total on Line 5. If you have both social security and Tier I railroad retirement tax, the maximum deduction allowed is the amount withheld as shown on the Form(s) W-2 less, either the amount entered on Federal Form 1040, Line 69, or, if only one employer, the amount refunded by the employer.
Line 6 - Medicare Tax
Include the total amount of Medicare tax for yourself and spouse (combined). If you are not subject to "additional Medicare tax" on your federal return, enter the amount from your Form(s) W-2.
If you are subject to "additional Medicare tax" on your federal return, enter the amounts as calculated below. You must attach a copy of Federal Form 8959.
- Wage Income: Form(s) W-2, Box 6, plus Line 7 of Federal Form 8959, minus Line 22 of Federal Form 8959;
- Railroad Retirement Compensation: Form(s) W-2, Box 14, plus Line 17 of Federal Form 8959, minus Line 23 of Federal Form 8959.
Line 7 - Self-Employment Tax
Include the amount from Federal Form 1040, Line 56 minus Line 27, plus Federal Form 8959, Line 13; or Federal Form 1040NR, Line 54 minus Line 27, plus Federal Form 8959, Line 13.
Line 9 - State and Local Income Taxes
Include the amount of income taxes from Federal Form 1040, Schedule A, Line 5. The amount you paid in state income taxes included in your federal itemized deductions, must be subtracted to determine Missouri itemized deductions.
Line 10 - Earnings Taxes
If you entered an amount on Line 9 and you live or work in the Kansas City or St. Louis area, you may have included earnings taxes. Include on Line 10 the amount of earnings taxes withheld shown on Forms W-2. See Diagram 1, Page 34, Box 19.
Line 12 - Total Missouri Itemized Deductions
If your total Missouri itemized deductions are less than your standard deduction (see Page 7, Line 14), you should take the standard deduction on Form MO-1040, Line 14, unless you were required to itemize your federal deductions.
PART 3 - PENSION AND SOCIAL SECURITY/ SOCIAL SECURITY DISABILITY/ MILITARY EXEMPTION
If you are claiming a pension, social security, social security disability, or military exemption, you must attach a copy of your federal return (pages 1 and 2), your Forms 1099-R, and SSA-1099. Failure to provide this information will result in your exemption being disallowed.
Public Pension Calculation
Public pensions are pensions received from any federal, state, or local government. If you have questions about whether your pension is a public or a private pension, contact your pension administrator.
Line 1 - Missouri Adjusted Gross Income
Include your Missouri adjusted gross income from Form MO-1040, Line 6.
Line 2 - Taxable Social Security Benefits
Include the taxable 2013 social securitybenefits for each spouse. This information can be found on:
- Federal Form 1040A - Line 14b
- Federal Form 1040 - Line 20b
Line 6 - Taxable Public Pension
Include the taxable 2013 public pension for each spouse. This information can be found on:
- Federal Form 1040A - Line 12b
- Federal Form 1040 - Line 16b
Do not include any payments from private pensions, social security benefits or railroad retirement payments on this line.
(Exception: If you are 100 percent disabled, you may consider railroad retirement as taxable public pension.)
Line 10 - Social Security or Social Security Disability Exemption
Include the amount from Lines 6Y and 6S from Part 3 of the MO-A, Section C (social security or social security disability calculation), unless you are a single individual with income greater than $85,000 or a married couple with income greater than $100,000. For single individuals with income greater than $85,000 enter the amount from Line 8 of Section C. For married couples with income greater than $100,000 , multiply Line 8 by the percentages on Line 3Y and 3S of the worksheet for Lines 4 and 5 (below), and enter those amounts here. If you are not eligible for the social security or social security disability exemption, enter a $0 on Line 10.
PRIVATE PENSION CALCULATION
Line 2 - Taxable Social Security Benefits
Include the taxable 2013 social security benefits. This information can be found on:
- Federal Form 1040A - Line 14b
- Federal Form 1040 - Line 20b
Line 6 - Taxable Pension
Include the taxable 2013 pension received from private sources for each spouse. This information can be found on:
- Federal Form 1040A - Lines 11b and 12b
- Federal Form 1040 - Lines 15b and 16b
Do not include any payments from public pensions, social security benefits, or railroad retirement payments on this line.
SOCIAL SECURITY OR SOCIAL SECURITY DISABILITY CALCULATION
Line 4 - Taxable Social Security Benefits
To take the social security exemption, you must be age 62 or older. An individual that receives social security retirement benefits, partial benefits at age 62, full benefits at age 65 or older, or a disabled individual receiving social security disability income (SSDI), who reaches full retirement age during the taxable year and receives retirement benefits should include on Line 4, the amount of federal taxable benefits, which can be found on:
- Federal Form 1040A - Line 14b
- Federal Form 1040 - Line 20b
Taxable social security benefits must be allocated by each spouse's share of the benefits received for the year. To determine each spouse's portion of the taxable social security on Line 4, complete worksheet for Lines 4 and 5 (below).
Line 5 - Taxable Social Security Disability Benefits
A disabled individual, receiving social security disability income (SSDI) for the entire taxable year should enter on Line 5, the amount of federal taxable benefits, which can be found on:
- Federal Form 1040A - Line 14b
- Federal Form 1040 - Line 20b
Taxable social security disability benefits must be allocated by each spouse's share of the benefits received for the year. To determine each spouse's portion of the taxable social security disability on Line 5, complete worksheet for Lines 4 and 5 (below).
A taxpayer filing single, head of household, qualifying widow(er), or married filing separate may not enter amounts on both Line 4, Taxable Social Security Benefits, and Line 5, Taxable Social Security Disability Benefits. Report only Social Security Benefits on Line 4 and Social Security Disability Benefits on Line 5. However, if you are married filing a combined return, one spouse may enter an amount on Line 4 and the other spouse may enter an amount on Line 5.
MILITARY PENSION CALCULATION
A military pension is a pension received for your service in a branch of the armed services of the United States, including the Missouri Army Reserve and Missouri National Guard. You must reduce your military pension exemption by any portion of your military pension that is included in the calculation of your public pension exemption. Therefore, if you qualify for the public pension, make sure you complete the Public Pension Calculation (Section A) before you calculate your military pension exemption.
Line 1 - Taxable Military Retirement Benefits
Include your total military retirement benefits reported on Federal Form 1040A, Line 12b or Federal Form 1040, Line 16b. If you are filing a combined return and both spouses had military retirement, combine those amounts on Line 1.
Line 2 - Taxable Public Pension
Include your total retirement benefits from public sources (including military) reported on Federal Form 1040A, Line 12b or Federal Form 1040, Line 16b. If you are filing a combined return and both spouses had retirement benefits from public sources, combine those amounts on Line 2.
Line 4 - Military Benefits Included in Public Pension Exemption
Multiply the percentage calculated on Line 3 by the total public pension amount reported on Line 13 of Section A. If you did not claim a public pension, enter $0.
Line 6 - Total Military Pension
The maximum military exemption you may claim in 2013 is equal to 60 percent of your military pension. Multiply the amount on Line 5 by 60 percent.