Missouri extends tax break to non-Missouri 529s
The Missouri Senate has approved a bill (SB 863) that provides Missouri taxpayers using non-Missouri 529 plans with the same state tax breaks enjoyed by those using Missouri's own 529 plan. The Missouri House previously approved the measure. It now goes to the governor who is expected to sign it. Missouri will become the fifth state to adopt state tax "parity" for 529 deductions.
The Missouri tax deduction for contributions to out-of-state 529 plans will be effective for 2008. The bill also provides joint filers with a maximum $16,000 annual state tax deduction regardless of which spouse is contributing. Previously, both spouses had to contribute $8,000 in a year to receive the maximum deduction.
The bill also removes 529 assets and distributions from Missouri financial aid formulas.