Merge pull request #5459 from DTrim99/DTrim99/issue5458

2024 MO top income tax and wftc adjustments
PolicyEngine · Jan 16, 2025 · ddb73f3 · ddb73f3
2 parents d3010ce + f2e14af
commit ddb73f3
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Showing 5 changed files with 34 additions and 7 deletions.
diff --git a/changelog_entry.yaml b/changelog_entry.yaml
@@ -0,0 +1,5 @@
+- bump: minor
+  changes:
+    added:
+      - Missouri 2024 and 2025 top income tax rate.
+      - Missouri 2024 working family tax credit match.
diff --git a/policyengine_us/parameters/gov/states/mo/tax/income/credits/wftc/match.yaml b/policyengine_us/parameters/gov/states/mo/tax/income/credits/wftc/match.yaml
@@ -1,10 +1,16 @@
-description: Missouri's Working Families Tax Credit matches this percent of the federal EITC.
+description: Missouri matches this percentage of the federal Earned Income Tax Credit under the Working Families Tax Credit.
 values:
   2023-01-01: 0.1
+  2024-01-01: 0.2
 metadata:
   unit: /1
   label: Missouri EITC match
   period: year
   reference:
-    - title: 143.177.  Missouri working family tax credit act
+    # Statute specifies initial 10% rate and allows increases up to 20% maximum,
+    # subject to state revenue conditions.
+    # Specific timing of increase to 20% is not defined in statute, but confirmed in 2024 changes.
+    - title: 143.177.  Missouri working family tax credit act (3)(2)
       href: https://revisor.mo.gov/main/OneSection.aspx?section=143.177&bid=49978&hl=
+    - title: Missouri Individual Income Tax Changes 2024
+      href: https://dor.mo.gov/taxation/individual/tax-types/income/year-changes/
diff --git a/...e_us/parameters/gov/states/mo/tax/income/deductions/mo_ss_or_ssd_deduction_allowance.yaml b/...e_us/parameters/gov/states/mo/tax/income/deductions/mo_ss_or_ssd_deduction_allowance.yaml
@@ -12,7 +12,7 @@ SURVIVING_SPOUSE:
 metadata:
   unit: currency-USD
   period: year
-  label: Missour social security or social security disability deduction allowance
+  label: Missouri social security or social security disability deduction allowance
   reference:
     - title: 2021 Form MO-1040 Individual Income Tax Long Form Instructions
       href: https://dor.mo.gov/forms/MO-1040%20Instructions_2021.pdf#page=3

diff --git a/..._us/parameters/gov/states/mo/tax/income/deductions/mo_ss_or_ssdi_exemption_threshold.yaml b/..._us/parameters/gov/states/mo/tax/income/deductions/mo_ss_or_ssdi_exemption_threshold.yaml
@@ -12,7 +12,7 @@ SURVIVING_SPOUSE:
 metadata:
   unit: currency-USD
   period: year
-  label: Missour social security or social security disability income exemption threshold
+  label: Missouri social security or social security disability income exemption threshold
   reference:
     - title: 2021 Form MO-1040 Individual Income Tax Long Form
       href: https://dor.mo.gov/forms/MO-A_2021.pdf#page=3

diff --git a/policyengine_us/parameters/gov/states/mo/tax/income/rates.yaml b/policyengine_us/parameters/gov/states/mo/tax/income/rates.yaml
@@ -93,7 +93,9 @@ brackets:
         uprating: gov.irs.uprating
     rate:
       2019-01-01: 0.05
-      2023-01-01: 0.0495    
+      2023-01-01: 0.0495
+      2024-01-01: 0.048
+      2025-01-01: 0.047
   - threshold:
       values:
         2019-01-01: 8_424
@@ -106,8 +108,17 @@ brackets:
     rate:
       2019-01-01: 0.054
       2022-01-01: 0.053
-      2023-01-01: 0.0495
-      2024-01-01: 0.048
+      2023-01-01: 0.0495 # Set by 143.011.2(1)
+      2024-01-01: 0.048 # Reduced by 0.15% per 143.011.3(1)
+      # First 0.1% reduction allowed per 143.011.4(1), confirmed in 2025
+      # withholding formula. Statutes allow further reductions to 0.046 in 2026
+      # and 0.045 in 2027, but we assume revenue conditions are not met until confirmed.
+      2025-01-01: 0.047
+      # We model rates through 2025 based on 143.011: initial 4.95% rate in 2023 
+      # (subsection 2(1)), 0.15% reduction to 4.8% in 2024 (subsection 3(1)), and first 
+      # 0.1% reduction to 4.7% in 2025 (subsection 4(1)). We do not model potential 
+      # further 0.1% reductions allowed in subsection 4 until revenue conditions are 
+      # confirmed met.
 
 metadata:
   reference:
@@ -123,6 +134,11 @@ metadata:
       href: https://revisor.mo.gov/main/OneSection.aspx?section=143.011&bid=51511&hl=
     - title: 2024 Missouri Withholding Tax Formula
       href: https://dor.mo.gov/forms/Withholding%20Formula_2024.pdf#page=2
+    - title: Missouri Individual Income Tax Changes 2024
+      href: https://dor.mo.gov/taxation/individual/tax-types/income/year-changes/
+    - title: 2025 Missouri Withholding Tax Formula
+      href: https://dor.mo.gov/forms/Withholding%20Table%20-%20Weekly_2025.pdf#page=2
+
   label: Missouri resident individual tax rates
   type: marginal_rate
   threshold_unit: currency-USD