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26 November 2024

Missouri to lower top personal income tax rate effective January 1, 2025

Missouri Governor Michael L. Parson has announced that effective January 1, 2025, the top personal income tax rate will be lowered from 4.8% to 4.7%.

This decrease is the result of legislation enacted in 2022 under SB 3 and SB 5, which allow for a potential decrease of 0.1% for each year that revenue goals are met until the top tax rate reaches 4.5%.

Governor Parson stated that net general revenue collections grew by $322.6 million from fiscal year 2023 to fiscal year 2024, allowing for the reduction in Missouri's top income tax rate from 4.8% to 4.7% effective January 1, 2025. This action marks the fifth income tax cut Governor Parson has implemented during his time in office, resulting in a total 1.2 percentage point tax rate reduction (0.5 in 2019, 0.1 in 2022, 0.35 in 2023, 0.15 in 2024 and 0.1 in 2025).

Supplemental wages

The rate of withholding on bonuses, equity compensation and other irregular payments will be lowered from 4.8% to 4.7% effective January 1, 2025.

The 2025 withholding tables and computer formula, once available, will be published here. (2024 Missouri Employer's Tax Guide, p.5.)

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Contact Information

For additional information concerning this Alert, please contact:

Workforce Tax Services - Employment Tax Advisory Services

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor

Document ID: 2024-2158

 

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