Missouri Tax Changes 2026: A CPA Guide | HelloBooks Missouri 2025: 100% capital gains subtraction, top rate 4.7%, federal-size standard deductions, larger credits, and no state tips or overtime deduction.
Missouri stopped taxing capital gains in 2025. That one change will reshape returns for investors and business sellers, while the new federal deductions stay federal only.
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Capital gains subtraction
100%
Applies: Tax year 2025From IRS.gov · checked October 10, 2026
Section 143.121 lets taxpayers subtract 100% of federal capital gains income in arriving at Missouri adjusted gross income, effective January 1, 2025. Clients who sold a business interest, real estate or investments in 2025 should see a large difference between federal and Missouri AGI.
The indexed brackets run from 2% to a top rate of 4.7% on income over $9,191. Standard deductions match the federal amounts: $15,750 single, $31,500 married filing combined.
The DOR says the federal tips, overtime, car loan interest and senior deductions have no Missouri equivalent.
The subtraction is only as good as the gain figure behind it. Keep sale proceeds and basis for each business asset in HelloBooks so the gain is supported if the return is questioned. Missouri sales tax is at /us/sales-tax/missouri.
General information for tax professionals, not advice on a specific return. Figures are from IRS.gov on the date shown; check the current IRS instructions before filing.
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