The Missouri Legislature recently approved an update to the state's property tax credit for seniors, a program that had not been updated since 2008. This update significantly increases income eligibility requirements and disbursement amounts, and will adjust for inflation going forward. Previously, only seniors over 65 or disabled with very low incomes qualified, and the benefits were shrinking in value.
Married couples will now qualify with incomes under $48,000, receiving up to $1,550 in benefits, a substantial increase from the previous $1,100 maximum. The Missouri Budget Project highlighted that the previous program left some qualifying individuals with benefits as low as $10 annually.
The bill is part of a larger tax cut package primarily benefiting high-income earners. This includes a deduction for federal capital gains tax, a policy that, if enacted, would make Missouri the first state to implement it. The inclusion of the senior tax credit and sales tax exemptions for diapers and feminine hygiene products helped gain bipartisan support.
Governor Mike Kehoe, who supports the bill, has received the legislation for final approval. The bill, House Bill 594, was passed 102-41.
JEFFERSON CITY — The Missouri Legislature this week sent Gov. Mike Kehoe a long-awaited update to an ailing tax credit for Missouri seniors.
The Missouri Property Tax Credit — nicknamed the “circuit breaker” — provides as much as a $1,100 benefit for homeowners and $750 for renters, but only those over 65 or disabled with very low incomes can qualify. For example, a married couple filing jointly must have household income of $34,000 or less to take advantage of the credit.
Even though the program was created in 1975 it hasn’t been updated since 2008 and doesn’t increase with inflation. As Social Security benefits rise, the program has been getting less and less use. In 2022, 140,026 people claimed over $80 million in benefits compared to just over 100,000 people claiming about $60 million in the most recent budget year.
Those who can apply are seeing dwindling benefits. A Missouri Budget Project report found that those at the top of the income requirements can get as little as $10 annually.
The proposal on the governor’s desk greatly increases the income eligibility requirements, disbursement amounts and would increase with inflation. Married applicants making less than $48,000 would receive up to $1,550 in benefits. In an interview with the Post-Dispatch Kehoe said the circuit breaker has always been an important “piece to try (and) figure out how we can help our seniors out.”
The circuit breaker reached the governor’s desk by way of a massive tax cut mostly benefiting the wealthiest Missourians. Taxpayers would be able to get a credit for the amount they pay in federal capital gains tax on things like stock sales. Just 8,230 Missourians who have an income over $1 million annually accounted for more than half of the state’s capital gains, according 2022 tax year data. Missouri would be the first state to have such a policy if Kehoe gives it final approval.
Kehoe has repeatedly voiced approval for cutting capital gains taxes this session.
Including the circuit breaker and a sales tax exemption for diapers and feminine hygiene products eased concerns for some queasy Republicans and skeptical Democrats.
“At least part of the bill is good,” Sen. Mike Cierpiot, R-Lee’s Summit, said in an interview Thursday.
House Speaker Jon Patterson, R-Lee’s Summit, talked up the “family first” aspects of the legislation in a news release.
“Cutting taxes on diapers and feminine hygiene products affects all Missouri families and will have the greatest positive impact with low-income women and girls across Missouri,” Patterson said.
The tax bill is House Bill 594.
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