MissouriMissouri would let tipped workers subtract tips from state income
If approved, workers in jobs that regularly receive tips could subtract qualifying tips from Missouri taxable income starting with tax years beginning in 2027.
What it does
Workers in jobs that regularly receive tips could subtract those tips from income used to calculate Missouri income tax. Employers generally would not have to withhold state tax from those tips.
Argument forTipped workers could owe less Missouri income tax because qualifying tips would be subtracted from their state income.
Argument againstWorkers may need to sort out which payments qualify as tips under federal definitions when preparing their Missouri tax returns.
More detail
Taxpayers could subtract qualifying tips from income used to calculate Missouri income tax. This applies to employees in occupations that customarily and regularly receive tips, with “tip” and “tipped employee” defined by federal law. Employers would not have to withhold Missouri tax from these tips unless federal law requires it. The subtraction would apply to tax years beginning on or after January 1, 2027.
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Where it stands
- Introduced
- Passed House
- Passed Senate
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- May 15Referred: Emerging Issues(H)Latest
- Jan 8Read Second Time (H)Minor
- Jan 7Read First Time (H)
- 2025
- Dec 4Prefiled (H)Introduced
Taxes & BudgetEconomy & Jobs